The Utility of Offshoring

Abstract

Most prominent arguments favoring the widespread discretionary business practice of sending jobs overseas, known as ‘offshoring,’ attempt to justify the trend by appeal to utilitarian principles. It is argued that when business can be performed more cost-effectively offshore, doing so tends, over the long-term, to achieve the greatest good for the greatest number. This claim is supported by evidence that exporting jobs actively promotes economic development overseas while simultaneously increasing the revenue of the exporting country. After showing that offshoring might indeed be justified on utilitarian grounds, I argue that according to Rawlsian social-contract theory, the practice is nevertheless irrational and unjust. For it unfairly expects the people of a given society to accept job-gain benefits to peoples of other societies as outweighing job-loss hardships it imposes on itself. Finally, I conclude that contrary to socialism, which relies much more on government control, capitalism constitutes a social contract that places a particularly strong moral obligation on corporations themselves to refrain from offshoring.