Saturday, January 07, 2006

No reason for you to economize

Yet another blatant example of ignorance to the natural role of price. Minister of Industry warns processed food producers not to produce abroad. He says, "There's no reason for domestic firms to outsource their production process abroad". Read here.

In fact, there's every reason to do that. One of which is very obvious: cost. There wouldn't be any such outsource had it been not cost saving. The Minister was (is?) an entrepreneur; how come he doesn't know this? He basically is saying: I don't care if you find it cheaper to produce your stuff out there -- you should produce it here. You should live with high cost economy, no matter what.

Ask this minister. How about we be fair to other countries. Urge their governments not to outsource to our country -- regardless of cost whatsoever. Autarky -- that's what you want? Why don't you also forbid TKI/TKW to go abroad? They outsource themselves!

And what would you do, Minister, jail them?

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