The Ethics of Software Outsourcing

Analyze whether the United States should outsource software development from several ethical viewpoints.

Introduction

Always act in your own self interest -- ex-boss

Many Santa Clara computer engineering professors ask their students where they are working. I am always surprised at the great number of students who are not. If these students are representative of the Silicon Valley job market, then its outlook is bleak. Many of these students' ex-jobs have been outsourced to lower cost countries such as India and now the Philippines. Software outsourcing has been a boon for such countries, creating many well paying jobs and stimulating their economies. Software outsourcing may also be a net benefit to the United States economy while hurting these students greatly.

Many people in other professions fear that the outsourcing wave will spread to their jobs. This fear has focused renewed attention on this previously software and manufacturing jobs issue. Many of today's arguments for and against outsourcing are based on ethical viewpoints. Many Americans argue that American companies should be supporting Americans or that the playing field is not level. In contrast, American companies almost invariably argue that it is their ethical obligation to maximize shareholder value. Many Indians and Indian companies argue that outsourcing has been a net benefit to America and that this trade promotes a common good. Some Americans take the opposite view, seeing outsourcing as a detriment to common good.

Utility Viewpoint

Outsourcing makes businesses more competitive, increasing their exports and their profits and placing more investment surpluses in their hands which can be deployed to make more jobs -- Indian Prime Minister Atal Bihari Vajpayee (1)

The utilitarian viewpoint states that an ethical question should be decided on the basis of the greatest good. Opponents measure utility for American workers and by implication the American economy. They argue that the loss of jobs will lead to the gutting of the middle class and the ruination of an economy based it. They point to the first net loss of American jobs in a Presidential term since Herbert Hoover as evidence. American programmers, in particular, are facing the highest unemployment rates ever measured for the group (2) despite an improving economy. American corporations in favor of outsourcing measure utility for the overall U.S. economy. They argue that outsourcing allows resources to be freed for greater innovation and that outsourcing promotes trade. These, they argue will ultimately create jobs. Opponents counter that what jobs are being created tend to be lower paying service jobs.