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I think he's saying that the costs of offshoring aren't reflected in the price, and that when you buy for the low price you also get liabilities you didn't know

I think he's saying that the costs of offshoring aren't reflected in the price, and that when you buy for the low price you also get liabilities you didn't know were there. Kind of like the externalities of oil and gas exploration, drilling, pollution, habitat destruction, etc that happen when you buy gas but aren't included in the price. EDIT: I don't think this is true, just an attempt to explain the article. Companies that buy bad outsourcing packages will lose to ones that manage their business better (onshore or off)

derobert 17y ago
Those costs are not at all kind of like externalities because an externality is an impact on a not directly involved ("external") party. But these costs are all on the organization who decided to outsource, so — unlike with externalities — one shouldn't expect a market failure, and the article does not provide evidence of one, or even claim one.
friism 17y ago
That may be so, but the external costs of oil and gas exploration are borne by society (thereby meriting government intervention) whereas liabilities incurred by offshoring mostly affect only the company. Government shouldn't try to keep private companies from making mistakes, the free market does a much better job of that.