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Intel Co-Founder Calls For Tax On Offshored Labor
theodp writes "Intel co-founder and ex-CEO Andy Grove calls BS on the truism that moving production offshore to locations with much lower wages is a sound idea. 'Not only did we lose an untold number of jobs,' says Grove, 'we broke the chain of experience that is so important in technological evolution. As happened with batteries, abandoning today's "commodity" manufacturing can lock you out of tomorrow's emerging industry.' To rebuild its industrial commons, Grove says the US should develop a system of financial incentives, including an extra tax on the product of offshored labor. 'If the result is a trade war,' Grove advises, 'treat it like other wars — fight to win.'"
If you send work off shore, you no longer get all the corporate welfare tax breaks that US companies get.
"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
Now, I would consider myself fairly conservative. Usually the argument goes "they're taking our jobs!! We need to enact protectionist policies to protect American workers!"
Doing this blindly, I have a problem with it-- it doesn't make economic sense. If we are more efficient at producing one good, and they are more efficient at producing something else, then it doesn't make sense for us to waste money trying to produce it ourselves in the States.
However, I cannot economically justify free trade when
1). the trade occurring is uni-directional (IE, we're buying from them and they're not buying anything of ours-- I don't count China's investment in Treasuries as real goods-based Trade [even though financial trade is _technically_ trade])
2). one of the countries (China) involved in the trade refuses to let their currency's value be determined by the market.
In other words, what we have now is not true "free trade". If it were free trade, China would be buying our products [unfortunately much of our product is now Intellectual Property and it's difficult to enforce consumption of these goods], and China would not be fixing the value of their currency. If they weren't fixing the value of their currency relative to ours, then any trade imbalances would be slowly corrected as it becomes more and more expensive (in dollars) to outsource labor/manufacturing to China.
The Intel guy is mostly right; we just differ on how the imbalance should be corrected. I'd much rather a natural, market-driven return to mean, than a politically dangerous (taxing imports) one.
If the laws and taxes make it economically infeasible to compete without offshoring, Intel like every other corporation will offshore. Grove is suggesting we make it more feasible to compete with local labor because of the long term benefits it will have for innovation. I expect if it were economically feasible to keep work here they would.
Nothing hypocritical here.
- For the complete works of Shakespeare: cat
When Grove was CEO of Intel, HE was the one who moved much of their R&D overseas because they were "unable to get qualified Americans."
Of course he did. When he was CEO of Intel, his job was to do what was best for Intel. Now that he is not the CEO of Intel, he is looking at a different picture: what is best for the USA. There is nothing two-faced about it.
"You want to know how to help your kids? Leave them the fuck alone." -George Carlin
He was still an American when he was CEO of Intel. Shouldn't his duty to his country take priority over his duty to his employer?