Welcome to Econ Talk, part of the Library of Economics and Liberty. I'm your host Russ Roberts

of George Mason University and Stanford University's Hoover Institution. Our website is econtalk.org

where you can subscribe, find other episodes, comment on this podcast, and find links to

another information related to today's conversation. Our email address is mail at econtalk.org. We'd

love to hear from you. My guest today is Edward Leamer, the Sean C.J. Medbury Professor of

Management, Professor of Economics, and Professor of Statistics at UCLA and Director of the UCLA

Anderson Forecast. Ed, welcome to Econ Talk. It's great to be here. Ed, I'd like to talk about

outsourcing and trade generally, partly in response to a lot of listeners who've asked for a

podcast on the topic, and partly because it's such an important area. I'd like to draw on a fascinating

article you wrote for the Journal of Economic Literature that will post on the econtalk website.

It's a review you wrote of Thomas Friedman's book The World Is Flat. It's a 58-page review,

and it's only sort of a review. It's really an excuse for you to give us your thoughts on trade.

I'd like to start with a point out that a lot of people worry about the so-called flatness,

the idea that we're all in competition with each other, and we could be losing all our jobs,

and our wages are plummeting, and the middle class is dying. But you argue that, in fact, for most

American workers, that fear is unlikely to be a reality. Why is that? Well, maybe we ought to start

with that flatness metaphor, in which I think is using the inside out way by Friedman to warn about

a world in which your job is contested by everybody else in the globe, by people in

Mexico City and Buenos Aires and Shanghai. Geography, whether it's flat or otherwise,

doesn't create that kind of outcome. It creates special relationships between the buyers and

sellers who have no living the same neighborhood. That limits the contestability. The metaphor,

first of all, is inappropriate. Secondly, the reality is that there are some for those jobs,

...