Offshoring: The Next Industrial Revolution?

IN FEBRUARY 2004, when N. Gregory Mankiw, a Harvard professor then serving as chairman of White House Council of Economic Advisers, caused a national uproar with a textbook statement about trade, economists rushed to his defense. Mankiw was commenting on phenomenon that has been clumsily dubbed (or offshore outsourcing)-the migration of jobs, but not people who perform them, from rich countries to poor ones. Offshoring, Mankiw said, is only the latest manifestation of gains from trade that economists have talked about at least since Adam Smith. ... More things are tradable than were tradable in past, and that's a good thing. Although Democratic and Republican politicians alike excoriated Mankiw for his callous…