[Stephen Roach, chief economist of Morgan Stanley, has written extensively on the “global labor arbitrage” and its increasing impact on politics and economics across the developed and developing worlds. The arbitrage is the result of two increasingly salient facts. First, a rapidly growing supply of skilled service-sector and technological workers is available, at low cost, in the emerging economies, most notably in China and India. And second, the internet and other information technologies are constantly reducing the transaction costs of employing these workers for firms headquartered in Europe and North America. The consequent spread of outsourcing in the service and technological innovation sectors of the developed economies is a hitherto unforeseen and destabilizing new feature of globalization.