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People Choose Offshoring

If you were given the choice of having a service job done in the United States, or having it done offshore, what would you choose?

It's not a hypothetical question. The online lender E-Loan has done exactly that — given its home equity loan customers the choice of having their application processed domestically or allowing it to be done in India. An overwhelming 86% of their customers choose offshoring if it means faster processing:

The pilot program, which launched in early February, currently has the capacity to process 25 percent of E-LOAN's home equity applications. Testing shows that 86 percent of the customers designated for the program are choosing to take advantage of the faster processing time associated with it — the ability to close their home equity loan in ten days versus twelve days. [source]

This is a powerful illustration of the antidiscriminatory nature of capitalism. A speed improvement of less than 10% overrides the xenophobic tendencies of almost everyone.

This is also, unfortunately, a reminder of the huge gulf between preferences revealed in voting versus preferences revealed in buying. Offshoring as a political principle does not enjoy anywhere near 86% support, clear from the simple fact that Lou Dobbs is still on television. Oh, and several states have passed measures to prohibit government work from being offshored. In the same way that most people think taxes are too high but wouldn't cut any of the largest government programs, people think offshoring is bad except when they notice it will save them time or money. Then they pile on.

Tiny Island