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Offshore Outsourcing Threatens Offshore Outsourcing
theodp writes "India offshore tech support companies may soon face job losses as U.S. companies such as IBM, Intel, Hewlett-Packard, Oracle and PeopleSoft explore countries with even cheaper sources of technical labor, including Romania, Russia, Hungary, the Czech Republic, the Philippines, Singapore, Thailand and Vietnam. Concerned that outsourcing might be outsourced from India in the near future, a Bangalore call center owner said 'It's hard to know where it will all end. Is there a country where people will work for free?'" There's a Newsforge story about the same subject.
Is there a country were people will work for free?
Yes, they are called open source developers and they are in every country around the world.
Outdoor digital photography, mostly in New Engl
Many of these awesome IT and software development jobs are turning more to be like mechanic jobs. Sure you need some training, but just about anyone can do a half-decent job. Half-decent enough for someone to hire you for pennies in a foreign country!
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Free your mind.
> explore countries with even cheaper sources of technical labor,
this kind of thing haunts most developers - and, every company out there who needs to get something done is always seeking for the smaller cost/quick solution for all their projects. its also become common that a lot of developers are lowering their rates just to get work - its not looking good at all..
meanwhile, i perform consulting services - and, i simply refuse to budge from my standard rate for employment. they pay a little more - but, they will get what they pay for. i have had many clients do development in india, then, come to me - and, for a little bit more they get the product faster, of higher quality - and, are very satisfied.
the sooner these companies realize cheap labour has its down-falls, the better of they will be.
Give it a rest. OSS isn't about working for free, it's about caring about what you're working on, and letting others give the same kind of care.
// file: mice.h
#include "frickin_lasers.h"
Now, the surprise on so many faces - "how can they do that to us", "how will our workers eat?", "We have so much labor, and they are moving operations to some backwater 3rd world country" ... will now be coming from New Delhi instead of New Jersey...
When your business consists of undercutting others, and providing services to willfully "outcompete" someone out of a job, don't expect pity.
As a piece of advice I once heard goes: "If you are stupid enough to date someone who dumped someone to be with you, don't be surprised when you get dumped, too."
meh
Open source only works if you want a piece of software that is good for everyone. Noone is going to come and write my factory control and admin system for free, even if they can give away the source afterwards.
Whats more, I don't think I'd trust running a control system that someone had written for free. Where would I get support? Updates? Who would I complain to if it went wrong without running the risk of the OSS programmers saying 'Sod it. Can't be bothered any more.'
As for the work being higher quality, you may well be write in the case of the big and famous OSS projects like Linux, OpenOffice, Gimp and so forth, but don't go thinking that OSS === Good Software any more than Pay For Software === Good Software. You get utter tripe in both camps.
http://twitter.com/onion2k
Once one company gets their employees to go along with a heath care cost increase or a salary cut, the other companies will rush to offer just as low pay and benefits. They call this "competitive" compensation. So if the jobs can be outsourced for cheaper, then the majority of businesses will all race to find where that is. It happened with manufacturing jobs, it is happening with service jobs. I don't really know what (if any) jobs are "safe."
Also, don't think this automatically translates into lower prices. It doesn't make the products better or less expensive, just cheaper to make. How much in lower prices do you pay for your Nike tennis shoes made in Burma?
Face it, corporations are in the business of making money, if they can reduce their costs by taking jobs elsewhere, they will do it.
Not that this is a bad thing, inefficiencies are weeded out, and companies can continue to make money.
Plus, the outsourced country benefits more than the whiny liberals care to admit. These jobs pay more than the local average, treat their workers a hell of a lot better, and boosts their economy.
So as a whole, this is not really a bad thing, except for the people losing their jobs. This is the free market at work.
SIG:Slashdot: indymedia for nerds.
Don't you love corporations?
It's not pretty, but this is what globalization and capitalism is all about. As people get more prosperous and affluent, they're less willing to work for rock bottom prices any more. Others undercut them and take their place in the food chain.
Sometimes this is a good thing, sometimes a bad thing. It brings economic development to poor parts of the world that can do things better and cheaper. It allocates resources very efficiently. But it also creates a lot of instability and waste of resources at the same time. Look how fast the jobs can be created -- and eliminated. And what happens to the people who used to have those jobs. And do you notice how the countries that take the shittiest jobs often end up with polluted environments as a result?
Someday, I hope we will come up with an understanding of how we can balance efficient economics and social good.
Let's look at a few trends:
- Automatization leads to fewer and fewer workers being needed to do the same amount of work, meaning higher profits for the producer.
- Outsourcing leads to those workers being paid less and less , meaning again higher profits.
- This, in turn leads to higher unemployment rates and a higher number of workers with low wages.
- While any individual company might profit from cost-cutting measures, wide-scaled implementation of these measures will lead to too few consumers with enough money to buy the products.
- Thus, to keep the system going, those profiting from it - the producers - must eventually give back enough of the profits to keep the whole thing going, otherwise the distribution of wealth will be too uneven to allow the system to work.
(If you happen to be immoral, other possible ways to boost the economy would be forceful destruction of goods and/or workers, which would a) create the need for rebuilding the destroyed goods and b) lower unemployment, because after the destruction there'd be not only more work but also less workers left. This process is commonly known as "war".)
just to be nitpicking on the subject wording
offshore outsourcING is not endangered.
offshore outsourceERS are troubled by cheaper competitors.
offshore outsourcING is alive and well.
Trust me: quality is always overshadowed by price in the standard US meet-the-quarterly-numbers business model.
I'm very surprised that the United States continues to outsource. Especially after 9/11. it will be
pretty easy for anyone to bury a "back door" into
the code they are contracted to write.
Lot's of features get lost in the language translation and coded ends up getting rewritten.
If I was a CEO of one of the large companies mentioned I would rethink my outsourcing.
I'm all for open source, but when it comes time to develop applications for Government agencies.. we should employ American Citizens.
Before people start complaining about more people overseas taking jobs, let's realize that this means more people in impoverished jobs having access at better jobs. They may not be getting the pay they deserve, but they will be getting paid a lot better than many of their fellow persons. That better pay in relativity means they will be able to give themselves and their families a better standard of living, which every human being on this planet deserves. This is the goal of free trade, isn't it?
If we've been smart (this is slashdot, right?), we've been saving money to help us through tougher times. More jobs will always be created.
// file: mice.h
#include "frickin_lasers.h"
If it's Arab oil on Arab land, in all fairness, why should the US profit from it?
What you're saying is you don't mind exploiting people, as long as you aren't among the ones exploited. Am I right?
other than
1) Supporting the likes of Osama bin Laden and Saddam Hussein by castrating the CIA
2) Raising taxes on successful productive people and giving the money to lazy welfare bums
3) Groveling to race hustlers and poverty pimps like Al Sharpton and Jesse Jackson
Yup. About the only way to win is to own your own business and screw your fellow Americans. We live in a society built around sociopathic greed.
It's a nice theory but you forget that equilibrium may never be attainable. Skill and knowledge starts in a location just as it did with all these industries for autmobiles, programming, etc.
So the cycle we have today, will be the cycle we have tomorrow, or hundreds of years from now, just with different industries, different technologies and different products. You'll benefit from the countries establishing better infrastructures, but did you really expect some countries to continue their civilizations on candle-power? The employment cycles and people wallowing in corporate migration-mires will continue. People will always be subject to the fear that they will lose their jobs to outsourcing. Infact it will be easier and faster every time as corporations establish a base of operations in all the potential countries, and have accumulated experience from making these shifts.
One place will always be better than another, in the eyes of a profit-seeker. Making these evaluations and determining the best choice is what executive decision makers get paid big money for, isn't it?
"Last one in is a rotten goblin!" - Kepp
"Kill or be killed" is not an enlightened guiding philosophy. It is not the principle upon which the United States or any other modern democracy was founded. It's unfortunate so much cynicism exists that this philosophy can become so widespread. It only leads to economic uncertainty, fear, and a life little better than living in a cave wondering how you are going to catch your next saber-toothed tiger.
Aspiring to be a human is not a right, it's a responsibility.
<a href="http://www.joblessjimmy.com">Work is dumb and so is Jobless Jimmy.</a>
What's the hubbub here? Outsourcing is outsourcing. If Company A needs workers, it's going to find them. Perhaps they want someone that can drive into work every day, or perhaps they're fine with someone overseas. Once you reach the "overseas level", does it really matter where overseas they came from?
Also, consider this. We (the US, other nations using a particular region for manpower, etc) are building up an infrastructure and a skilled workforce in a way by creating demand for workers in that area. The area becomes known as a hotspot, wages (and usually the standard of living) rise, all is well. Then it's on to the next area that provides "cheap" labor.
And it's not just overseas where this happens. How many US companies are based in DE or NV because of their tax laws (no, this doesn't relate to actual labor but it does have to do with business decisions and where something is based).
"He uses statistics as a drunken man uses lampposts...for support rather than illumination." - Andrew Lang
Mwhaha. America has no former colonies. It is a former colony itself. It has current colonies though: Afghanistan and Irak.
One of the horrible things about the global economy is that it makes labor essentially a worthless commodity, since the amount of supply far exceeds demand. Due to anti-competitive pressures, new businesses aren't forming to soak up excess demand for cheaper products. Therefore, a few select corporations profit immensely, while the population of the rest of the world gets treated like slaves. But, hey, I guess the word "free" is in "free trade", so therefore it must be a good thing.
However, at the end of each bit of the cycle, the areas are richer than at the start.
Thre are now more educated people in India, they have a better economy and they've got moer infrastructure than before.
As the money gets pumped from place to place, there's a gradual (and slow) increase in the quality of living.
Eventually you run out of people who will work for rice and you have to step up to paying a slightly higher amount, and the big cycle begins again.
My Journal
For the most part India was a good solution because India has a large population of English speaking people. That's why Vietnam nor China was as favored. Most Indians speak multiple languages, and English is the official language. Now their English is different than American English as anyone who's ever used tech support can attest, but it's better than a non-English person trying to learn English. All in all it would be no different if tech support was located in certain counties in Ireland or England.
I'm not sure what the language situation is in Eastern Europe, but I think that, though their population is educated, that they don't have the high percentage or number of English speakers that India does. Those who can speak English in these countries may cost more as they are more in demand.
The move to Eastern Europe may be a pure cost cutting measure, but I think these companies should look at quality too.
Well, there's spam egg sausage and spam, that's not got much spam in it.
It's economic darwinism. Of course it exists. Of course it's our basic instinct -- it's how we are in our most basic form in all facets of our life. No one is saying it's an enlightened philosophy but it is truth. An inherent truth in any society that is going to get ahead in any terms. It's just that instead of it being a personal darwinism (I kill another human being because he threatens my superiority) it's in a more macro scale -- Company A undermines Company B so that they can stay ahead.
This is my digital signature. 10011011001
And that's when they transfer you to "their supervisor" - who's back here in the US and actually knows the product.
But the call center full of untrained people in India with computer screens guiding them? They're fine for about 99% of the clueless users out there who don't realize that the answer is in the documentation.
-- Josh Turiel
"2. Do not eat iPod Shuffle."
I've got to raise a point here that really bugs me when I hear people talk about "Evil Corporations" versus "The People" (or similarly how most of the world likes "the American people" but hates our "Government". I'm not questioning that governments or corporations can do shitty things, what I'm saying is that "corporations" and "governments" don't do shit, PEOPLE do shit, and I don't believe that some people are better or worse than other people. Everybody is a nice guy and an asshole. I am the American government. I am the Democratic party and the Republican party. I am the CEO of AOL. I am the Nation of Islam. I am an Indian worker at a cheap plant in Bangladesh. What I mean is, what motivates me isn't much different from what motivates anybody, and all that seperates anybody from anybody is what opportunities you've been exposed to, good and bad. A homeless guy could be the President were he exposed to the same opportunities, and your grandmother could knife a gangmember, if she had to.
In other words, find a better reason to bitch, that shit is tired and played. Everybody.
First of all, if anyone actually said business is about saving the world, then you were stupid for believing them. Of course its about making corporations rich! And let's not obfuscate things, it's about making individuals rich, stockholders specifically. Which is awesome! That means that they were able to present someone with a better alternative use for their dollars than anyone else at a moment in time.
Anyway, the whole free trade thing...I live in Texas. I'm tremendously concerned about: <MASSIVE SMARM>
Come to think of it, I'm a programmer living in Dallas. I'm very concerned about all of the IT jobs that have gone to Austin and Houston. Perhaps I'll petition my local government to restrict companies from farming out jobs to them.</MASSIVE SMARM>
Here's the point: I pursue those restrictive policies, and so Austin does too. Or Florida, or whatever. Of course, Florida wouldn't care about the orange grove jobs they'd lose to Texas, so they'd do something like Texas-produced steel, or something we specialize at, just like Chicago specializes (duh) in Chicago tourism.
To an economist, this is a real head shaker. This whole sequence I'm talking about is called reciprocity. It's a solved problem in game theory. The only people who argue about it are people who haven't read and understand the solution, i.e., 90% of the whole world, unfortuately.
Now that I've kind of dropped a nuke on this whole argument, I'm going to pull back a bit. There is such a thing as hidden costs in free trade. I obviously understand fundamentally that free trade is a Pareto optimal solution for nations, and yet, I don't think we should trade with China under certain circumstances. Why? Because the cost of goods carries a moral cost borne in production not represented by the price. If I buy a shirt from China, I'm not entirely sure it wasn't produced by PoliticalPrisonCo (motto: where products are made by people who think like Americans!) I'm open to the idea that that factor might exist elsewhere. I don't, however, see that factor in dealing with India.
If your bitterest enemies are people who hack the heads off civilians, then I would say you're doing something right.
I fear I can't completely agree with this. There are too many cases where an organization, be it corporation or government, really does exhibit behavior that's different from its constituents. Look at an organization as a sort of life form built out of people, just like people are life forms built out of organs and cells, etc. Members will do things "for the organization" that they just wouldn't do on their own, or for themselves.
IMHO, there is a real difference here.
The living have better things to do than to continue hating the dead.
No, you need to find a high-paying occupation that by its nature cannot be outsourced to foreign countries.
This is why so many intelligent Americans end up being lawyers.
"dope will get you through times of no money better than money will get you through times of no dope"
Your comment defeats itself. If a country can undersell India, it is likely that the income from GlobalCorp, Inc. will have a greater impact for good there than it had in India.
I *personally* saw a group of Romanian engineers designing car parts for an American company. They were getting paid $400-$500 per month. You might say it's deplorable to do that. What if I told you that the average Romanian income was $100-$150 per month at the time? All of a sudden it's not so bad.
The point is that they are not getting paid as well as an American, but they are better off than the alternative, namely leaving them to struggle out of their bad economy on their own. In fact, barriers on trade actually *cost* third-world countries $150 Billion/year.
Free trade proponents *don't* claim that GlobalCorp, Inc. is doing it out of the good of their heart, as you imply. The point, in fact, is that they are *not* doing it out of the good of their heart, i.e. they are being rationally motivated to produce more efficiently. I agree with the sister post here that said that moral considerations sometimes play a part (i.e. products of true slave labor). However, we will not get rid of poverty until we reduce scarcity. Encouraging efficient production is part of that process. Where would we be now if machines didn't replace many factory workers? We would probably be working in old factories, with much lower standards of living. (Efficiency has made life better for those who still work in factories today.) In the end, how else are these countries supposed to escape poverty?
Boom Shanka
I want more outsourcing! In fact, I want companies to start outsourcing managers, exects, QAs, designers, and accountants. I want those people to feel the results of unemployment and I can't wait to see guys in Armani suits bitch about it! Why? Because I want them to feel what thousdands of American IT workers feel right now. I want them to wonder about all the years they spent in college, all the loans, morgages, families, kids and their future. This is how I feel whenever I start cutting out coupons and wonder if I have enough money to pay my rent this month.
Until the issue of foreign labor hits the hightest steps of corporate ladder nothing is going to be done. The funny thing is that if outsourcing is going to continue at this pace, pretty soon we'll end up in a world where only a few people will have buying power. Both American and foreign workers will not have capital; just watch the world's economy go down the crapper.
Yes it does - the Philippines.
This can be clearly seen in the French governments illegal blockades on British beef. Years after they were taken to court and found to be blocking imports for no valid reason, they are still doing it, because otherwise their rural farming communities would go bankrupt (and agriculture is a powerful voter influence in France).
The same is true of steel import tariffs imposed by Bush.
So, we can see that fundamentally the concept of free trade is broken - like most of classical economics, it doesn not work in the real world, and to pretend it does is to deny reality.
Most "real" economists have realised that free trade is not something that should be preached, because despite best intentions it has simply become an abused idea. "Free trade" in practice meant the ability for the US to freely export its goods, but not the other way around (and Europe is just as bad in many respects). This has led to crippled economies in the third world.
So, to say it's a "solved problem in game theory" is correct - it's a solved problem in theory only. In practice, it's not a solved problem and people are looking at alternative economic constructs to help increase wealth and distribute it more fairly (see the work of Lietaer and Gesell for some examples).
You do know that Saddam did all of those awful things, like gasing his own people before the first war. Why wasn't that a good enough reason then?
/. more than once and haven't encountered some variation on this lame joke from south park. Sure, the episode was funny, but as a slashdot joke, it's played. seriously played. Even by slashdot standards.
Ask the UN. They preferred to give saddam another decade in power.
Local taxes support the infrastructure of the city that I live in. State taxes support my state. I don't believe that every cent that I give in taxes - as an American - goes to all "welfare bums". Obviously you have little respect for your fellow Americans who may be in a lower tax bracket than you. Do all of us a favor and please move to a different country. Right now. And take your friends, too.
Welfare recipients do not pay taxes. They do not pay property taxes, they do not pay state income taxes, they do not pay national taxes. Yet they receive a living from other people's taxes. I understand that sometimes people need a little help, however I fail to understand how 'a lifetime of subsistence living paid for by others' is *help*. My problem is not with *a* welfare system, it's with the *current* welfare system. I also believe that people *should* contribute to charity, but that doesn't mean I'm going to propose legislation that not only forces them to, but also specifies the amount they must give, and to whom it will be given.
Also something people need to realize: we only have about half the people in the country paying taxes. How low will that number get before the despised 'rich' who are now paying the vast majority of actual tax dollars decide to go somewhere where they don't have to subsidize the same ratio of people? We have an interesting phenomenon in this country: we all want to have more money, but anyone with more money than us is evil. Of course, I don't see *any* prominent politicians living in habitat for humanity housing and giving every last little bit of their money away. In fact, I was told that one of the senators from WA was 'a great man' because *once a month* he invited a homeless person to dinner. Wow man. Once a month you bring some poor homeless guy into your mansion, and let him have a taste of what you get the rest of the time, then send him back outside. That sure is a 'great man.' Think, people. Politicians don't care about you. They care about your vote, and spending your money. If wealth redistribution is such a good thing, why are the Kennedys still so freaking rich? Not that redistribution would work. If we took every bit of money and property in this country, and distributed it exactly equally to everyone, do you really think it would stay that way? Giving everyone in this country the same amount of money would not make them exactly the same.
Also, I see a lot of this 'aww the rich get a bigger tax cut! that isn't fair!' Well no, not if by fair you mean exactly the same for everyone. But if by fair you mean that the people who pay the most in taxes get the biggest benefit, well...shouldn't they? Here's an example for you.
Let's say I'm out to dinner with some of my friends, and when the bill comes, I can only pay 10% of it, bob can afford 30% of it, and bill gets stuck with the 60% remaining, plus tip. Now say we get a 30 dollar refund for bad service or food or something. Do we split it evenly, three ways? Of course not. Bill gets 18 bucks, bob gets 9, and I get 3. How would it be fair to split it evenly, when not everyone contributed equally?
I'd also like to point out that the tax cut we're getting isn't the one Mr. Bush proposed. It's substantially smaller. If it isn't helping enough people, perhaps you should look to the libbies who killed the larger tax cut.
3) Makes absolutely no sense.
I can't believe that you've read
Just one last question for you. How long did you actually serve in the public sector? You seem like such a giving individual that g
http://xkcd.com/386/
Horsehockey.
First of all, if anyone actually said business is about saving the world, then you were stupid for believing them.
That's EXACTLY what was said when NAFTA was found out in 1994 before the Clinton administration rammed it through Congress. It was marketed as being beneficial for Mexicans and Americans. It was pushed as a way of exporting capitalism and American values to Mexico. So far, Mexico has been devastated, and so have the Americans who have relied on those "bad" jobs.
Of course its about making corporations rich! And let's not obfuscate things, it's about making individuals rich, stockholders specifically. Which is awesome! That means that they were able to present someone with a better alternative use for their dollars than anyone else at a moment in time.
Stockholders represent a very small portion of the population, typically upper-class, since most of the lower and middle class can't afford to ride out the low points such as the dot com crash. The rich getting rich while the poor lose their jobs is not "awesome!" as you put it.
Anyway, the whole free trade thing...I live in Texas. I'm tremendously concerned about:
the orange grove picker jobs that have been exported to Florida
the snowmobile rental jobs farmed out to Colorado
the Chicago tourism jobs exported to Chicago...
Come to think of it, I'm a programmer living in Dallas. I'm very concerned about all of the IT jobs that have gone to Austin and Houston. Perhaps I'll petition my local government to restrict companies from farming out jobs to them.
You miss one crucial factor, and that is that all states have the same federal minimum wage. This has huge effect on how things work. Free trade would be great if Mexicans, Indians, et al. had the same minimum wage that we do. That way, they would have enough money to buy from Americans, not just foreign branches of multinationals that can afford to drop the price low enough. In other words, we would all benefit from such a scenario, although the rich would benefit less.
Here's the point: I pursue those restrictive policies, and so Austin does too. Or Florida, or whatever. Of course, Florida wouldn't care about the orange grove jobs they'd lose to Texas, so they'd do something like Texas-produced steel, or something we specialize at, just like Chicago specializes (duh) in Chicago tourism.
But, you miss the point. The difference in wages between countries, along with barriers to competition is having a disaterous effect on our economy. The labor market is being flooded, but barriers to competition are keeping the number of businesses relatively constant. The result of this is that labor is getting more and more desperate, while large multinational corporations(not small businesses) are profiting immensely. Things will eventually reach equilibrium, but only when the majority of Americans have a far lower standard of living.
To an economist, this is a real head shaker. This whole sequence I'm talking about is called reciprocity. It's a solved problem in game theory. The only people who argue about it are people who haven't read and understand the solution, i.e., 90% of the whole world, unfortuately.
I understand it, but they are conveniently leaving things out. I will comment on some of the headings in the article you sent.
Trade Creates Wealth, Not Jobs
I agree with this, which is why I'm against it. It's making a small population of investors rich. Note that the only investors making money off this are those with enough money to dip into profits, which typically are the billionaires that own over 50% of a company. Free trade does not necesarily promote growth, so typical investors aren't getting any of this. The rest of America, with almost 50% owing more than they own(which means that have negative net worth) are going to be left without a safety net, and with a very poor standard of living.
We Trade for I
Good points. It's easy to point the finger at seemingly faceless corporations. Here's a question to ask ourselves - do we shop only at Younker's or Macy's, or do we feel it's better to save money and shop at Wal-mart? Probably not the best analogy since the exporting of labor brings about a patriotic argument as well.
But that brings up yet another point - don't point fingers at corporations about how they have no loyalty to the US workforce, and then drive home in your fsckin' Honda or Toyota.
Sorry, I wish I could have presented a more balanced and non-wandering argument, but, well, ya know...
Labor supply is indeed far in excess of demand. But your solution seems to be to corner off small portions of labor and exclude the rest so that these small portions of labor remain in demand in their protectionist markets. What this amounts to is making these people "in demand" by relegating some people to an "even less in demand than before" ghetto where they can't even be considered for employment. In short, if the average free-market wage would be $0.75/day (making up numbers here), your solution increases the wage in some countries to $100/day at the expense of decreasing it in others to $0.10/day. Which is pretty much how things are.
But you claim this is justified?
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
We Trade for Imports
Yes, we do trade for imports,....
Unilateral Free Trade
This is a joke, the aim of our corporate government is not to get imports into the US, but to get our corporations into their markets, which is why they only trade with countries that trade with us.
Ok, it seems like the two quotes are contradicting each other. By "we" in the first statement, I mean the people of the US. In the second statement, I am referring to the corporate government, whose motives are different, IMO. There are also two kinds of imports, which I didn't necessarly make clear. There are intra-corporate imports, which is what corporations want, and their are imports that come from foreign companies which is what the rest of us Americans should desire. The reason we want the latter, is because foreign companies will typically return more of the profits to that country, which will mean higher wages for countries we trade with, which means more consumption by that country and more money flowing back into the American middle class. Intra-corporate imports means lower wages, and the profits get returned to that company and it's investors, who will simply hoard that money.
I benefit from being able to buy German beer, Japanense video games, French cheese, Canadian video cards, Turkish tobacco... Shouldn't people produce and sell what they can do best? If Indians (or Romanians) are efficient at producting software, more power to them. The economist Thomas Sowell does a good job of explaining why different countries are good at different things.
I remember some years back when there was a local uproar about a Home Depot being built in Auburn, California. The big complaint was that Home Depot is a Georgia based company. Folks didn't want their California dollars going out of state to those Georgians all the way on the other side of the US. The cost of living is cheaper in Georgia. Buying things from Georgians is a "race to the bottom". Only buy things made in your own state... no, your own town... no, only things you make yourself!
---
"If an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another." - Milton Friedman
"Give a man a fish and he will ask for tartar sauce and French fries!"
Open source programmers and their viral GPL are slowly destroying the value of our high quality, patriotic, made in the USA software like Windows and SCO Unix. I think the only solution at this point is, through legislation, to restrict access to compilers, debuggers, emacs, vim and other software tools to God fearing American corporations. Home PC's must be registered with the government, and it should only be legal to run the IE web browser and that Army game on legacy PC's. This can be enforced with random spot checks. All new PC's must not include hard drives, (indeed hard drives will be classified as a munition and not available to the general public) and really can be nothing more than dumb terminals with a web browser hard wired into the firmware. God Bless America! Remember your motto citizen! "For AOL, Microsoft, God and Country!"
When I was spending time in the Philippine's several years ago, I had an interesting talk with an elected official in one of the provinces. He was discussing why developing countries had so much trouble becoming richer. They attract companies because of their low wages but if the wages start to go up, the companies simply relocate to a poorer country. How to break the cycle, he didn't know and I sure don't. The third world being kept poor to support the West I suppose.
One would think that more than two centuries after The Wealth of Nations was published this sort of dark, superstitious nonsense would have been extinguished by the light of reason. Sadly such is not the case.
The beauty of a market is, provided that fraud is not allowed, the greed of all paradoxically leads to the betterment of all. Yes, the corporation wishes to spend less, and so goes with a cheaper supplier of the same good. Well, guess what--that's better. If B can produce the same as A for less, then it is a waste of one's money to use A; it's also a waste of A's time. Going with the cheaper supplier rewards those who do more with less; it is economical.
You know this, I'm certain. Who does not shop for the best prices on groceries? Why is it bad for an employer to shop for the best prices on labour? Of course it's not.
There is the law of comparative advantage to keep in mind as well. If A is better at X and B is better at Y, then it is best for A to devote all his time to X and B to devote all his time to Y; this ends up yielding far more of both X and Y than otherwise. If India is better at call-centre staffing at the US is better at R & D or at finance, then it is best for India to focus on call centres and the US to focus on R & D or finance. This yields more call centres (a good thing) and more research or financing (also a good thing).
The message in return being sent to Americans isn't,"Thanks for helping us get to where we are.", but instead was, "Other countries are out-competing us, you better start working more hours." Of course, what they don't state explicitly, is that you are simply competing with another branch of your employer in a different country.
Hey, you have no right to a living. Why should anyone pay you more to work less? It's insane, like buying lettuce for $50/head. That's what competition is about. It's rough, but that's Real Life.
Congratulations. You've just defined reciprocity.
Ahh, Slashdot. The home of the irrelevant truth. I'm not arguing that countries don't engage in trade restrictions, I'm arguing that according to game theory those decisions are contra bono.
Saying that the concept of free trade is "broken" because it's not always practiced is like saying that the idea of health is "broken" because people smoke. I don't "deny reality" to say that it is bad to smoke just because people do smoke.
Next item, crippled third world economies. So third world countries are better off without external investment? No need to take that any further.
By the way, you're right: the Bush steel import tariff's are asinine.
If your bitterest enemies are people who hack the heads off civilians, then I would say you're doing something right.
Uh, I am as much a fan of American cars as anyone, and hated to see the demise of the GM F-body cars (Camaro and Firebird). However
Honda builds their boxy Element SUV in Ohio.
Oddessey Minivans come from Lincoln, AL
On the other hand, my 1995 Pontiac Firebird is from Quebec and my wife's 2002 Chrysler PT Cruiser is from Mexico.
This is how the world will look for the next fifty years or so. Formerly, markets and labor pools were isolated from one another by transport and regulatory barriers, with the result that standards of living could vary wildly from one part of the planet to another. Now, the barriers are low or gone, which means that the places with lower-priced labor are pulling jobs from higher-priced areas. Of course, this decreases the econonmic level of the former and increases the latter, causing wages to fall in the source country and rise in the sink country. Let this process run long enough, and the whole world will have roughly comparable labor pools working for roughly comparable wages at a roughly comparable standard of living. If we're lucky, we'll get everyone at something close to the current "first world" standard; if not, we'll get a straight averaging of the current world situation.
When all you have is a hammer, everything looks like a skull.
Your premise is misguided. Not all Corporations are out to screw everyone. Correct. "Corporations" are out to make money, whether they screw someone in the process is inconsequential to it, that is unless, again, it impacts them getting money.
Individuals in corporations who make decisions may or may not be out to screw everyone. That's up to the individual and his/her psychiatrist.
Remember, corporations aren't people. It's what our legal system leads you to believe. People still make decisions.
"Last one in is a rotten goblin!" - Kepp
Therefore, the fact that these jobs are spreading out is caused by the fact that A. The U.S and other countries currencies are overvalued and the same standard of living can be bought for less in a country with undervalued currency or B. The people living in these lower wage countries have big families to provide for and not so great living conditions and would really like to move one step up the standard of living ladder which means moving the person who lost their job in the high wage country a step down on the ladder. Of course with comparative advantage this is not always a zero sum game.
This is all a big process of equalization of living standards that takes place once people started embracing free market economies and free trade a bunch of years ago. The only thing that makes any difference now is immovable capital like infrastructure and the quality of the legal system.
How else do you support those executives at the top that produce nothing of substance
(and sorry folks, "business decisions" are not items of substance) yet pay these guys
a Mil a year and up? They sit on each others Boards, upping each other's compensation,
all enjoying the cash flow circle jerk.
There's (at least) three ways; theft, lawsuits, and slavery.
The theft happens in places like manipulating the stock markets and shuffling around
nonexistent commodities like Enron, or something as simple as lobbying the government
to allow usury rates of >30% on credit cards, or allowing state-run lotteries and casinos.
Or, if you're thinking big, invading another country on false pretenses to steal their resources.
The lawsuits we are seeing with SCO are a good example of the second method. Granted, it's
one corporation taking from another in this case, but the cost of that will be passed down to
consumers or compensated for with unemployment because of less working capital. That
expense rarely impacts executive compensation, which is preserved at all costs.
Money moves around, yet produces nothing of substance. Maybe this really belongs
under theft, because that's what it is.
And then there is slavery. Sure, these people don't work "for free". But even in the US's
past, the slaves were still fed, clothed and sheltered. You can't kill 'em off or there will be
no slaves left to produce those items of substance. But when the profit is made from those
items, only enough is put back to the slave population keep the system working. It's
happening in Mexico, in Indonesia, in India, and in the US migrant worker camps from
the Midwest to California. This is, of course, nothing new. The US was made possible
through the exploitation of others. We saw a bit of change here after the post-war boom
of the '50s and again in the '90s for a few years but when "money" sees this happening,
it moves to quickly remedy the situation, usually by installing a Republican run government.
Here in Indianapolis, there's an area north of the city where they are building these huge,
multi-million dollar houses. Hundreds of them. Where does this money come from?
Is it necessary? Steven Hilbert, who ran Conseco has this huge mansion. He was ran out
of the company for fraud and theft yet he's got his castle. And you've now got this army
of VP weasels that all think that they too deserve to take one to on hundred million a year
and bury in in the ground so they, the trophy wife, and the trust fund kids can live like kings.
Instead of taking the working capital and putting it back into the company, letting people make
a working wage, they instead believe that they should, indeed deserve, to surround themselves
with rewards of their greed and cunning.
That money has to come from someplace, and that's from the backs of those with no other option
but to be enslaved, or starve. This can't last forever, but it's end is not coming soon. At least not
until the lease on their new Hummer H2 runs out. At least that's what Rush told me: It's a good thing.
india is a large country. bangalor is new york and patna is wichita. calcutta is very cheap to live in. and so on...there are so many places modernising in a hurry.
I can name one country where a huge variety of normal tangible goods are still manufactured, and the workers work for "almost" free, and that is the US, where prison industries now use inmate labor in direct competition to "normal" free market workers. And I definetly don't mean license plates, I mean normal stuff you buy at the store like furniture and whatnot. And it's run by private, for-profit corporations. Hard to compete when you have a tax payer subsidised infrastructure,ie the prisons, and where the forced workers "make" like 10 cents an hour or something that they get to re spend back into the same private corporations prison stores. Add in the fact of the growing prison population due to more political-like crimes such as represented as the war on some drugs, and yes, there are places where the workers work for "free". I also just read an article last week or so, maybe here, I've forgotten, where prisoners in India are being used as forced programmers.
As to software, oh well. I think eventually (I have no exact time prediction, just some time in the somewhat near future) that software writing as a pure and extremly profitable business will eventually be very limited. That's primarily because right now we already have available most of the software that is required to do business, it exists already when you get down to it. Next is to take the automation concept to it's logical progression, the tools to write programs are getting easier, there are millions more very young people now who take it as a matter of course to learn these the same as "shop class' was when I was a kid and most guys my age can do a lot of normal car mechanics and carpentry, etc, and eventually those two lines on a graph of easy to do and millions doing it will cross and we'll have a full saturation point, where at that exact time the "worth" of software will be no more than todays throw away newspaper, so cheap as to be almost free. And the ones remaining still writing a lot will be doing it as at best an adjunct to their other and more primary job task, whatever that is, or doing it as a hobby, similar to learning to play a musical instrument is now, most people never make a cent from enjoying playing music. I'm not saying it-softweare writing to get back to it- will disappear,not in the least, just lose it's incredible profitable market share. Look back in that industry 40 or 50 years, see what people were paid for it and what the companies doing it were charging,and how many people by the numbers were doing it (take into consideration COL and inflation obviously), and now look at today-globally, you are forced to, now extrapolate it.
Ain't looking as rosy now is it? Especially with the amazing geometric progression.
I give it as a rough WAG to the commercial expensive software writing and selling bubble will burst within ten years or so (maybe less even), the high paid stuff anyway, and settle back down to a more normal type endeavor, not be quirte as sexy or in demand. I also think that people in that business and who are still paid well are (mostly and sure to be very much debated on this particular forum, but not on general forums) in just as much denial today of that prediction as various people were when they were buying stocks from companies that were trading at 200 times earnings and still sat on them, thinking this was going to just keep going on forever, even when on even a casual glance anyone could see these various companies had no net earnings whatsoever once you deducted VC. Millions of sane, intelligent adults fell for that, too, they were in complete denial of economic realities, because they (not all obviously, but most) were basking in temporary and theoretical future "wealth" they would receive magically,effortlessly, and forever. that gravy train was going to go on forever, that was the gross generic mindset then. Right now, it's the same mindset with various other aspects of industry, I'd say in particular besides software the professional managers in various industries, who think they are
In what way does this benefit the US?
Do you like the fact that your car gets 26 miles per gallon? Thank the Japanese for figuring out how to make fuel-efficient cars and hurting the American auto companies until they too learned how to adapt.
Like your Sony audio equipment? Like the fact that it's not twice as expensive? Again, thank Japan for finding out how to make stuff cheap.
How about your computer? Isn't it great that RAM costs less than $1 per 100 megs? Remember when 16 megs of RAM cost about $300? Like, ten years ago? I sure am glad that Taiwanese memory companies kicked our ass so i could buy a great computer for under $1500.
And your ISP -- they're dirt cheap. If they had to use American workers for tech support, you'd better believe you wouldn't find access for $9.95 / month.
I try to avoid the "Everyone knows..." play in an argument unless it's really the case, and this is one such time: Any economist will tell you that free trade between nations is better, economically, for everyone involved. Adam Smith wrote long ago in Wealth of Nations that the only reasons to restrict trade were diplomatic and military; economically, it is always bad to "Buy American."
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Mod up a post Rob doesn't like and you'll never mod again
Just like some people dont like big government, some dont like big corperations, and its for the same reasons. You dont want all the power to be in one persons hands.
If you want people to stop begging the USA for money perhaps we should help them start their own businesses in their own countries instead of forcing our businesses into their countries, I dont know any arabs who asked for Mc Donalds to expand there, in fact it pisses them off.
If you use Linux, please help development of Autopac
Capitalism is not constant. The capitalist economy we have today bears little resemblance to the economic context in which Smith wrote The Wealth of Nation.
The beauty of a market is, provided that fraud is not allowed, the greed of all paradoxically leads to the betterment of all.
Most of the rest of your post is attempting to support this argument. This is a valid, but oversimplified view. Classical or pure economics has long been known to be inadequate to fully understand economies, especially today. For instance, in Adam Smiths age there was no concept of real time currency speculation, a factor that plays a major role in todays financial markets.
No country today uses pure capitalism, in much the same way that nobody uses pure socialism - instead a blend of systems is preferred. In particular a purely market based system, which you would appear to be advocating, is by its very nature undemocratic. The rules are easily bent, and even broken. We all know one good example of that.
Hey, you have no right to a living
That is not correct, at least not for a large section of the worlds population. Under European human rights laws, I have a "right" to a minimum standard of living, which is normally guaranteed by state welfare. Most people would agree that this is the civilised thing to do, unless you would like to see people literally dying of unemployment on the streets.
Why should anyone pay you more to work less?
Being paid more to work less, is essentially what economic progress is about. I no longer have to grow my own food and till my own fields, arguably I have it rather easy, yet I can afford a nice flat and technology beyond the wildest dreams of somebody only 50 years ago.
That's what competition is about. It's rough, but that's Real Life.
Life is what we make it. Money is merely a social construct we invented - contrary to popular belief, it does not control us, we control it.
Hey, you have no right to a living.
That's true. Of course, if too many people have no more living anymore, they tend to rise up and kill the rich people. This may or may not be an economically intelligent response, but historically it's a very common one.
One of the overlooked benefits of employing people who live around you, is that if they're working they generally don't mob together to kill you. The C-level execs of American have forgotten that. I sadly suspect they'll begin remembering all too soon.
The problem with corporations is that we tolerate, neigh EXPECT immoral and unethical actions out of them. The corporate structure exits specifically to sheild it's members (and investors) from any direct responsibility.
Thus, you have an entity that is expected to act in a commpletely amoral manner AND shields it's members from the adverse consequences of this amorality.
It should be no surprise to anyone that a corporation will tend towards evil.
It's expected too and it's individual contributors are shielded from consequences.
The proper model for corporate behaivor is prison inmates.
A Pirate and a Puritan look the same on a balance sheet.
Redistribution on savings via Bank gearing ratio only fund profit-making businesses and repayable loans. The only thing a poor man gets from Bank gearing ratio redistribution is a damn 50-year mortgage. You can buy yourself into slavery YEEEEEHA!
But what happens when all the products are built and sold? If everybody has an overengineered car and an overengineered house that will last 1000 years, then what profit-making businesses will appear for the Banks to give repayable loans to, where will the jobs come from if everybody has overengineered stuff?
The people demand jobs. This is why the entire Federal government will never be computerised and will never fire 99% of their staff that sit on their asses and do nothing.
A caveman dreams of being us, the incalculable power and riches. We dream of being Q, then what?
Wow. Now I really want a time machine to take me back to 100 years ago. Because according to you, before the advent of public schools, the world was a utopia.
Perhaps they did not have the modern conveniences, but 100 years ago people were undoubtedly more civilized than today. The world was hardly a utopia, but people were more intelligent and more kind towards one another. We are not talking about utopia, we are merely talking about day to day civility.
So the world was filled with clones of Plato and Aristotle, filling the world with enlightened thoughts. But tell me, if the world was filled with altruistic free thinkers, who formulated and implemented this vast conspiracy?
The first public school systems on a vast scale were implimented in Prussia after their defeat at the hands of Napolean in 1803 at the battle of Jena. The military regime of the german military machine was applied to the youngest of ages. It was later adopted by german industrial powers, until American powers grasp on to the idea. The French used forced schooling more for eliminating Celtic languages during the early days of the Third Republic.
I must say however that the initial impetuts was in fact Plato's republic, which you obviously have not read. Whole chapters deal with this very concept of forced education. Check out Warped Minds, Warped Societies some day. Plato was obviously influenced heavily by the Spartans.
One would suspect, especially one with a sense of humor and a taste for sarcasm, that Brave New World was written to satirize this type of world and make free thinkers examine their own world. (Oops, no more free thinkers. Blows that theory to shit.)
I don't follow your logic, but you are right. The book was written to satirize the way society was being forcibly changed.
And you escaped this web of mind control, how?
And who is talking about mind control? There is a big difference between social conditioning and mind control.
So, in this utopia of pre-public education, there were no violent acts, violations of others rights, or crime of any kind?
And who is making this assertion?
By amoral, I mean unthinking. The reason military training techniques are so necessary is you do not want your soldiers questioning your orders. This is perhaps desirable on the battlefield, but when it is transferred to every day life the results are unpredictable. Hate to tell you this, but Plato discusses this in the Republic.
The protagonists are of course the Germans. Read up on those very early post-napoleanic compulsory schools in Prussia.
Don't forget to refresh the tin-foil in your hat. Cheers.
Wow you're really fucking creative aren't you. Please, if you are going to insult me, try to use something a wee little bit more creative.
I don't read or respond to AC posts
I have/had an optimistic phrase/mantra:
"There is far more stupidity than evil in the world."
In recent year(s) I've added a less optimistic one.
"Sufficient stupidity combined with sufficient power may be indistinguishable from evil."
Kind of like Clarke's Third Law, only pessimistically applied to ethics.
The living have better things to do than to continue hating the dead.