Demand for PC's went through the roof in '99 and '00. I worked for Intc at the time and their stock price hit an all time high in Q3 '00 – it tanked when they announced their profit warning in Sept'00 and led the way down for the rest of tech.

Actually, that is *exactly* the point. The Chinese government’s artificial suppression of its own currency is what enables labor to be cheap relative to the rest of the world. It is a government-designed strategic advantage, not a natural consequence of free market dynamics.

“If you meant Chinese labour moving to America, then its even more ridiculous. Immigration policies as barriers? Then Americans will be complaining because literally they’ll see Chinese taking their jobs everywhere.”

That is exactly what I mean. Of course, people will complain, including free marketeers because it eliminates their source of ridiculously cheap labor. I brought it up not because I support this idea, but to demonstrate that outsourcing companies are *not* capitalizing on free trade. They are capitalizing on *government interference* in free trade that happens to favor them (immigration barriers as well as artificially devaluing currency, in China’s case).

The very existence of huge wage disparities is proof that the market is neither free nor efficient. People should stop justifying outsourcing as if it was a natural outcome of free market dynamics because it is obviously not. It’s primarily an artificial outcome of government policies.

I'm not sure if you really understand what's going on. The Chinese government is still called the communist party but there's no "taking land away and relocating" people.

These workers who come from around China make more as a worker in the industrialized cities. Maybe the situation you're talking about applies in the 60s and 70s but it's the 21st century.

The avg. wage has increased 2-3 times in parts of China and partly due to the fact that the Government has set up worker protection policies such as OT pay. To say that the Chinese government artificially supplies cheap labour is somehow not very to the point.

I dont really get what you mean by the Chinese moving to where wages are higher? are you talking about the US or other developed countries or just within China? Generally movement within the country is not restricted and do you think that businesses arent smart enough to move to places where labour is cheaper?

If you meant Chinese labour moving to America, then its even more ridiculous. Immigration policies as barriers? Then Americans will be complaining because literally they'll see Chinese taking their jobs everywhere.

Posted By Jon Risseeuw, Boone IA

You have alternatives: buy a Mac or install Linux. I say, buy a Mac.

I'm guessing by the tone of the posts that everyone who jumped on Will is an economist or at the very least has a complete and thorough understanding of global economics. I somehow doubt it.

Everyone is running around spewing half cocked perceptions that they have convinced themselves are true, when in fact the only person who got it right in my opinion was Leo from Portland.

Actually, the reason why Chinese labor is so cheap has little to do with free trade ideology and everything to do with government manipulation of the market.

It should not be a surprise that the Chinese government, the largest Communist government in the world, is not a proponent of free market ideology. Chinese labor is absurdly cheap because the Chinese government artificially suppresses the value of its own currency, giving it a huge artificial advantage in the export market.

It should also not surprise you that the Chinese government gives gigantic tax breaks and other economic perks to foreign companies. For a Communist country, providing cheap labor is not a problem. You simply take land from a few thousand peasants, forcibly relocate them to an industrial city, and tell them "You live here now." What's free market about that?

The huge wage disparity between Chinese and American labor could not exist in a real free market. In a free market, Chinese people would simply move to where the wages are higher, and cheap labor would disappear. The real origin of cheap labor is in fact *not* created by the free market, but by government *interference* in the free market.

If you are to blame Intel, go blame Walmart too, they're the biggest seller/importer of foreign goods. Oh btw, just to let you know, you would probably be able to afford half what you currently can if you also keep production of your kettle, your toaster or your microwave in the states.

It's all about production costs and eventually the reduced costs gets reflected into the price…which you pay less!

That's what happens, it's called comparative advantage if you've learned some economics. Welcome again to the world of survival of the fittest. I guess you have no clue.