the idea is that if your productivity increases and you do 5 days of work in just 4 days you will be eaten alive by other companies based in countries where they are just as productive but decide to keep working 5 days instead.

Only if your company outsources your job there though.

Even if your company doesn't outsource your job, your customers might 'outsource' their business, and you'll end up with no job either way.

There’s a lot more there in the mix for customers oursourcing their business than a mere productivity measure. What stops them from outsourcing your business, the Fridays in the office?

Definitely. That's why this doesn't really work for stuff like mass market manufacturing where your productive output is proportional to how long workers spend on the assembly line, but more for the companies that are in the innovation and knowledge work business and have secured a lucrative niche, where no competitiveness is lost due to fewer hours, but that's a relatively small percentage of the total employment.

Why not communism? Seems pretty appealing.