As many people know, Paul Craig Roberts has been the strongest critic of outsourcing among economists in this country. His latest article attacks a report by the Cato Institute on free trade and outsourcing.

While I respect Craig for his outspokenness on the loss of civil liberties in this country, and for Bush’s illegal war in Iraq, nonetheless I strongly disagree with the points he is making, but would urge readers to look at his arguments for themselves.In a recent email covering this subject, I wrote the following:

Craig is saying that the higher the prices paid to owners of factors of production, the more valuable is the production itself. This is a rendition of the old Cost of Production Theory of Value, or what later would morph into Marx’s Labor Theory of Value.

Furthermore, while Ricardo’s explanation of comparative advantage is remarkable, even though he used the Labor Theory of Value to explain it, nonetheless, the efficacy of free trade does not depend upon capital being forced to stop at national boundaries.

What Craig does is to state the same thing over and over again, and if one argues against it, he goes into a tirade, accusing people of being bought and paid for by corporations or repeating a mantra of “free trade.” He also commits the error of assuming that production is done for its own sake, and forgets the fact that ALL production ultimately is for consumption.

Now, this is not a personal attack on PCR, but rather a disagreement with what he is saying.