Powerful Corporate Interests

Robert Kuttner: Double standard on globalization

"...IF YOU get into a conversation with a billing representative of your credit card provider or phone company, you may notice a faint Indian accent. That's because the services industry is shifting more back room operations to India, where labor costs are a fraction of those in the United States. IBM, likewise, will soon move several thousand computer programming jobs to India, where programmers get far lower salaries. This decision has angered IBM employees and is contributing to a rare unionization drive at the high-tech giant, a company that once prided itself on never laying anyone off.

In these cases, industry defends the moves as cost-effective and economically logical. If productive English-speaking workers in India can perform the jobs, why not move the work there and pass the savings along to shareholders and consumers? Most economists, enthusiasts of free commerce, agree that these shifts help both India and the United States.

But hold on a moment. India figures in another controversy. Indian pharmaceutical labs make prescription drugs at a fraction of the cost that American drug makers charge consumers. In this case, however, it is illegal for American consumers to benefit. The politically powerful pharmaceutical industry contends that imports of cheaper foreign drugs violate patent rights and safety regulations. The industry is also battling legislation that would allow consumers to import cheaper drugs from Canada, which legally manufactures or purchases the drugs under license from the US pharmaceutical companies and conforms to US safety standards or better.

If you notice a double standard here, you're right..."