On the heels of the dot.com bubble, the term "labor arbitrage," appeared as a technical euphemism for what the general US labor force referred to with great anxiety as, "Outsourcing."   Thanks to changes in Clinton era policy and the emergence of the internet, it was easier than ever to employ abroad at lower rates.  In doing so, the hope was that this quid-pro-quo-ish arrangement would lead millions of latent foreign consumers to buy American products.  This would in turn lead to a global economic interdependence and subsequent great peace and prosperity for all. Things didn't play out that way exactly.  China, India, Singapore, and others certainly did grow richer.  For various reasons, American businesses didn't swoop in and recapture that wealth though.  Moreover, the labor trade goes both ways.  Despite not adding any intrinsic value itself, arbitrage provides the general economic utility of helping market prices reach equilibrium.  If l...