ABSTRACT
The increasing magnitude of offshoring and outsourcing production in low-income countries gives rise to a debate on their impact on labor in developed countries. Standard economists (with a few exceptions like Rodrik) have a narrow approach to this phenomenon, measuring the number of jobs affected and concluding that they are few in comparison with the bulk of jobs created and destroyed each year in the developed countries. Radical economists have a broader approach, considering the impact of international capital mobility on the capital-labor relationship. Yet, the effects of the global organization of firms are not well integrated in the analysis of neoliberalism. Offshoring and outsourcing to low-wage countries enable transnational corporations to play workers off against each other. This chapter seeks to demonstrate that this “labor arbitrage” (Roach 2003), or “global auction” (Brown and Lauder 2001, 2003), or “organization of competition between workers” (Pottier 2003), constitutes a new direction in globalization and a new era of capitalism.
