The lessons learnt from outsourcing was long in coming. “Cheap” manufacturing meant taking “cost” advantage of foreign exchange and purchasing power disparities between rich nations and poor ones. And the low costs that were outcomes of these arrangements were bandied as “efficiency gains” in the home market despite no real operating efficiencies being actually realised from all this. The global monetary system said so by assigning numbers to these “costs” in a way that made profit-and-loss statements look good — highlighting what a flawed cost scoring system money as we know it really is at best. In terms of actual quantity of energy consumed and human capital utilised for every unit of product, manufacturing in a poor country actually resulted in real efficiency losses overall.
These losses were left out of the equation by virtue of the way financial statements in the originating country externalise the “rest of the world”. The thing about globalisation is that it is turning the planet into a single economic unit. Thus efficiency “gains” in one country can, in principle, no longer be counted in isolation as the true cost of letting, say, China do the dirty work of burning coal to power factories will come back to bite in that now-ominous way that we are beginning to understand.
The United States now scrambles to repatriate jobs and rebuild an industrial base eroded by decades of misguided “off-shoring” at the altar of the gods of “faster, better, cheaper”. Perhaps the time has come for Third World countries like the Philippines to start re-evaluating its place in the global economic order. Should the Philippines start its own program of repatriating workers to match efforts in the rich world to repatriate jobs? That can only be done once we find it within us to apply the brakes and set a course for ourselves that is different to the one set for us by traditional experts.
Societies that exhibit enough foresight will win that race to revert to a more sensible, sustainable, and self-sufficient approach to managing its resources and capital. Ultimately people matter no matter what the financial scorecard says. And there is ample evidence that points to the massive flaw in the way we measure value today.