Slashdot Mirror
How India is Saving Capitalism
alphakappa writes "Salon goes onsite to Chennai (Madras) in India to investigate the whole offshoring phenemenon (free daypass) and comes up with an interesting series of stories. Katharine Mieszkowski starts with a company CollabNet which creates collaboration software for teams to work together on projects from locations all over the globe, and has centers in Brisbane (CA,US) and Chennai (India) - a company that would not exist if they didn't have access to engineers from India. She makes the case that in most cases, it is the necessity to survive, rather than greed that has fed the offshoring process. As Behlendorf from CollabNet puts it - 'We saved the jobs of the people who are employed in San Francisco by hiring people here [in India],' he says. 'I don't know that we would be around as a company if we hadn't done that. What was the right thing to do, morally?'"
Since when did capitalism have anything to do with morality?
So now the media thinks we should *thank* them for taking our jobs. :-) Capitalism is great for the top 2% of the country. For the rest of us... Well, we dont have time to think about shit like that, we have to get up, go to work and make other people rich...
When will the middle class realize that the upper 2% is screwing us in the ass daily, and actually do something about it???? We are the *majority* afterall...
--Ryan
that every company's situation is different. While it may be true that CollabNet has to outsource to survive, other companies (Dell comes to mind) DO NOT need to outsource to survive, they outsource because it is cheaper. We can argue all day about the morality of outsourcing, but the bottom line is going to be profit in many cases.
'I don't know that we would be around as a company if we hadn't done that. What was the right thing to do, morally?'"
The right thing to do, morally, is probably to go out of business. What if the choice was to not pay for workman's comp insurance or go out of business? Or to pay their employees $2 an hour or go out of business? Using "but... but... we'll go out of business if we don't do this" is a lame ass excuse.
To ensure perfect aim, shoot first and call whatever you hit the target
Thats why its been called "A race to the bottom". Once your competitors start hiring offshore, you're forced to do it to compete on price.
The NY Times Tom Friedman has written many articles arguing a similar point.
Nike wouldnt exist if it wasnt for childeren in Pakistan. http://www.american.edu/TED/nike.htm
Are you intolerant of intolerant people?
Sounds a lot like justification to me. Whatever helps him sleep at night.
We couldn't save all the jobs, so we saved half.
If companies refused to go off shore, then everyone would be able to survive and we wouldn't lose any jobs.
Can I bum a sig?
The real question here should be not was this right morally, I think we Americans are being far too self-righteous (not like that'd be unusual..) if we put it in terms of morality. What we really should be asking here is what can we do to warrant our pay? How can we become more competitive in an increasingly connected world? Rather than complaining about outsourcing, we need to find out how to be more competitive. Any ideas?
The old rationalization was "we outsource to increase value for our shareholders". How generous!
Now, this rationalization, it's "we outsource so at least some people in the US can keep their jobs". How noble!
Prediction: later it will be "we outsource because otherwise we'd have to move entirely out of country and then the US wouldn't get our taxes." How civic!
All have the same underlying message they wish to send, "we want to help people!" But corporations don't generally exist to help people, they exist to make money.
There are 2 _good_ reasons to outsource, both based on the fact that labor is always the number one expense for a company.
1) We can stay in business, whereas otherwise we can't. 2) It makes us more money long-term (not just short-term profit sheets). Unfortunately, both may be true right now.
A.
As many people are still wanting the wife/husband, 2.3 kids, a dog/cat, 2 cars, a TV, home theatre, good computer (maybe 2), etc, goods and services will have to remain relatively inexpensive.
Now add in health insurance for the family, dental insurance, minumum wages, retirement matching, etc etc that a company has to setup for its labor in American, and you'll see that goods and services cannot be inexpensive if made in America. The cost of labor is too high here if we are to guarantee cheap goods and services.
It's an interesting paradox: In order to keep prices reasonable for a middle class, a majority of the labor needs to be paid at or just above the poverty line...which would theoretically remove the middle class.
So what should we do? In my eyes you either make wages worth more to the people (ie lower taxes) so you can offer less, or you cut down the overhead cost of labor (ie have the government install laws against frivolous malpractice lawsuits to reduce health insurance costs).
What do you think?
(Taking tongue away from cheek) Ha ha only serious. On a more positive note, it's also India's Bandwidth Capital because of all those transpacific cables landing here via Singapore. And electricity is very cheap here, probably the cheapest among all of India's major cities.
I believe that it can be shown with little doubt that it is corporate greed that has led to the current situation. That said, it is not necessarily corporate greed that is the current motivator... it just started the chain of events.
With all other corporate scandals and problems taking place, greed is essentially at the center of the motivation wht with pump and dump activities, monopoly abuse, anti-trusts and the lot going on. But the start of the trend changed the landscape considerably.
I complained in-person to a Dell representative about Dell's off-shoring of support to India. I exclaimed that I would never again buy Dell while they are off-shoring the ONE thing that made Dell great -- their support. The representative said it was a decision made so that it could remain competitive. I still think it's a tremendously stupid and inappropriate thing for Dell to do -- sell-out on their one and only unique selling-point and gambling with their brand-name as their primary value...bad idea guys! Now Dell is just another clone! Back to IBM for big business.
Anyway, I digress. I believe that the start of this is corporate greed and the current status of the problem is now competitive culture. The end of it, if there will be any, will start with legislation. Only law can correct the problems that greed/capitalism creates.
I can't beleive how dense these outsourcing people are. You employ 100 people to develop software to ship thousands of jobs overseas. How does that help us?
I really dont understand how companies can layoff people, send their jobs overseas, and expect their profits to rise. They layoff people, their customers... WHO will buy their products? with no one having enough money to buy them.
There is only ONE reason for outsourcing. Only one reason: to make the CEOs and execs of these companies more money.
These stories of how outsourcing is better in the end are a complete farse. There is NO benefit for the average american worker.
http://github.com/gbook/nidb
In one sense this is helping to achieve some economic unity, but by and large as far as I can see the general trend is for things to "spiral down" into a competitive frenzy.
Ideally, standards in developing countries should rise to those in developed countries. Instead we are seeing some rise in developing countries at the expense of a fall in economy in the developed countries.
IMHO, protectionist import taxes should be avoided, but it is high time the wto encouraged countries such as India to impose taxes on these boom industries and feed the revenues back into thier own infrastructure so that health, education and other structures can be improved. Perhaps a start would be impose "export taxes" to limit thier growth to agreed limits.
And if you thought that was boring you obviously havn't read my Journal ;-)
Sometimes the morally right thing to do is not the best thing to do. For example, at the fall of Germany a large amount of medical research data was siezed - most of it the result of some incredibly horrific experiments on prisoners. The morally right thing to do would to have been to lock away that information, as it was tainted by the methods used to obtain it.
I'm not saying that the cases compare at all - the difference in scale is huge - it's just a good example. So, your company needs to employ 20 people but only has the resources for 15. Do you
a) Outsource 10 jobs to somewhere where you can pay half the wage, thereby keeping the business afloat
b) Fold
c) Try to limp on on 15, provide a substandard service and end up folding
d) Ramp up your prices to pay for the extra 5, lose your customers and fold.
Option a loses the country 10 jobs, options b-d lose all of them. So, the answer is easy, yes?
Question 2: What happens to your competitor who you just managed to undercut...
'Don't worry' said the trees when they saw the axe coming, 'The handle is one of us.'
" The moral thing to do is for management is to uphold their DUTY to the shareholders"
That isn't a moral imperative, that's a fiscal imperative. But fiscal duty can and must take a back seat to moral imperative, otherwise you can justify virtually anything by saying "I had a duty to the shareholders...".
NO.
Corporations exist as a legal fiction primarily because society decided the benefit outweighed the risks. If corporations become more of a burden or risk to society than they pay back, they will simply be done away with (in a legal sense).
There is no inherent right for a corporation to exist.
Keep bringin in the problems: -Capitalism -Outsourcing -Jobloss in US Now give me the solution? -Communism? Anarchism? -Companies going down? -Still no jobs for countrys like India It seems to me that this egoism of some countries is that they want their jobs kept, on the cost of jobs for people from countries who arent as rich as the US. We all are so noble to keep saying we want wealth spread over the world, and not let "those capitalist pigs" from the US keep the most money. But how do we react if countries like India take our jobs for being cheap and being good? We scream as if we where an poor country! C'mon, those countries and companies are beginning how it works, how the US has done it for decennia. Dont start worrying if they get the jobs for being cheaper, cause thats how capitalisme works, the cheaper guy gets the job, just as you buy the cheaper product for same quality. So the problem is capitalism? Maybe, but that because we need to evolve to a form a capitalism (opposed to the original form of Adam Smith), where we can care about people. And with people I mean the US, Europe, China, India, and all others. We could manage ourselves perfectly, because we where the strong ones. Now that other formal poor countries are coming to an strong and educated civilation we cry like we get hurt where it hurts, like we have been hurting them for a long time. So now it is time for us to show we are 'more civilisized' once again, and come to a more social form of capitalism, where we care about the people who get or dont get the jobs. But dont yell at the India or their companies for picking up any job they could get, we have been doing it for way to long.
(:
You know, there's a similar situation going on in the farming industry. It's been declining since the 70s - THE 1770s. Back then I think 90% of people were farmers, and thanks to *progress*, we don't need that many people working to feed the country. There are people all over the midwest complaining that their way of life is going to disappear, and we all pay extra taxes to subsidize their plight -- the plight of people unwilling to change jobs when the market disappears.
And not only do we pay higher taxes, and higher prices for food, but farmers in places like Africa have nowhere to send their goods, and they don't have the infrastructure to do anything else.
I think it was Bill Maher who said (and I'm paraphrasing), "Americans seemed to be more concerned with taking their own lifestyles from 10 to 11 than to help others bring theirs from 0 to 1." And that's the absolute truth. No one reading this is starving. Even if you did nothing but collect welfare, your lifestyle would still be better than 90% of the world.
So, you're a programmer. Someone else can do your job for 1/4 of the price with the same quality. You have a few choices:
1. Find an employer who requires a warm ass in a seat in the States.
2. Raise the quality of your work.
3. Be your own boss.
4. Change careers.
You know how the RIAA doesn't provide a unique service anymore? Neither do you. You have lots of competition, and right now you can't compete. Or can you?
That is, if you see any bandwagon passing by that sounds like a plausible explanation to the real motivation, jump to it and see where the ride takes you.
First, it was because it just meant reconverting lower-tech jobs into "creative jobs", whatever the hell it means. That didn't quite float.
Then you see another bandwagon, say, a study that says students are not choosing computer science as much as they used to and claim that the reason why you're moving the jobs is because you can't find enough skilled people locally. Apparently the masses of skilled people finding themselves in the unemployed lists didn't quite bite that one either.
Next one, let's turn things around and show how the offshoring is actually helping the economy and the people by creating New Exciting(TM) employement opportunities as a middle-man parasite. Anyone wants to wager how far that bandwagon will travel?
The fact is that companies are doing that to cut costs and increase profit. Plain and simple in a capitalist market. The interesting thing is that they have to try so hard to make whacky justifications about it, pointing out the general consumer population (remember, we're not people, we're consumers) doesn't quite like the idea.
---- Take the Space Quiz!
My biggest problem with outsourcing is that it is the product of a system which is skewed in favour of corporates, and screws the little guy. The problem as I see it is that one of the reasons why wage costs are so high in developed nations is because our cost of living is equally high. And one of the reasons for the cost of living being so high is because people cost too much to hire. But the problem we are getting now is that companies don't want to hire expensive people so they outsource. But the prices don't go down to reflect this. So as a labour force we still can't compete because our cost of living remains too high.
Detroit was faced with the same problem in the 70's. The Japanese were whipping us six ways to Sunday. The unions wanted us to support American-made cars even though they were utter crap. You could go into a showroom and see that the doors were mis-aligned, switches were poorly installed, etc. And that's just what you could see doing a casual inspection. American public said, "I don't think so" and purchased Hondas, Toyotas and Datsuns (now Nissan) They were simply far better products.
Detroit bitched bellered and bawled about it but finally got their act together and started producing a much better product. For Detroit, it was a stark reminder that they couldn't just throw up barriers and hope to have a captive market. It was painful but they came around and are able to compete globally now where in the 70's they were getting creamed.
Same thing is happening to us - we simply have to be able to compete. Whining about unfair competition just makes us look like whiners.
You might ask how you can compete with a $5/hour worker. What I've done is started a small business that uses software I wrote. The business is large enough to support me and a couple of other people but small enough that it doesn't attract competition. Niches abound if you're willing to go look for them. Just don't sit around waiting for someone to hand you a job - get out and create your own job.
"Major American companies get most of their business from the WORLD. It was convenient for Americans to enjoy record growth and prosperity when the world sent their huge investment dollars to the U.S., purchased tickets to watch Hollywood movies, and purchased American products. During these very same boom years, 99.9% of Americans completely ignored the plight of poor workers in the Third World who complained of illegal farm subsidies and globalization issues. Now, some of these same Third World countries have opened up their markets (India/China), educated themselves, adopted American-style marketing and are competing on a more level playing field. American workers...have to show why they should be paid more for a job that can be done equally well for a lower cost in India/China. If they can't show this, they will have to develop new industries and skills to adjust for their lack of advantage."
...at least on an individual level.
If you are a developer in the US and you are worried about outsourcing, get a job that requires a security clearance. That job must always be done by a US citizen, in the US, and therefore can never be moved offshore.
In the Washington DC area there is a huge, huge demand for IT people with clearance, and there are also lots of companies that will hire you and help you get a clearance.
"I don't know half of you half as well as I should like, and I like less than half of you half as well as you deserve."
What was the right thing to do, morally?
Quit paying you and the top executives and senior management team filthy, unreasonable salaries. Not only are they inappropriate in most cases, the fact you failed (repeat that over and over again a few times to let it sink in) means the top brass should take it, not the producers in your company.
This is not the rant of some 20-something employee just out of college. I've run two companies I founded and grew, and don't see that I should fleece my customers or shareholders for obscene personal benefit (yes, $100K individually and over in this economy is obscene - you need to be living with less, providing good jobs for people, and investing in rebuilding your company!)
I see this over and over again. Wharten, Harvard, Yale types born on third base (thinking they hit a triple), that are slaughtering company after company for short term protection of their fat income. I own and run a tech company in the midwest that employs twenty people, and I'm the lowest paid. And no, it doesn't produce amazing profits I pocket as dividends. Someday it will be a nice company but I haven't earned that yet.
I get those silver spoon types all the time telling me how I should outsource my labor - which would be possible for us. Put all the tech oversees, along with support call center. I'd be making over $300K annually. The funny thing? They simply cannot understand why I would want to make less and employ people, because (you may have guessed), THAT IS WORK! Outsource it and collect the checks is the new Harvard MBA strategy, apparently.
Seems I saw the movie Wall Street. I've seen people pursue short term profit through slaughter. But you know, someone's gonna have to be around to buy your product, and if you get rid of the middle class, you might not have many customers. And don't forget, as long as you're expensive overhead (and not producing hard, tangible results towards the bottom line), you're expendible too.
Brazil has a very viable capitalistic system, too.
Unfortunately 95% of the people are quite poor but for the rest it's an excellent place.
Once the USA had it's middle-class destroyed, too, it will definitely resemble Brazil.
Sigged!
It's a dirty little secret of modern Capitalism that it basically can't work the way it's "supposed" to, given the current conditions. I'm not trolling, and I'll be specific.
The Classical theories on which Capitalism is based were written in the 19th Century. At that time, capital was basically land, and labor was much more free to move about than it is today. Before anyone objects that transportation is more advanced today, let me explain what I mean: in those days, workers were not locked into compartments from which they could not escape, and could basically go where the work was without having to worry about passports and work visas. Anyway, because of the conditions that obtained in the 19th Century, the Classical theories are based on assumptions of immobile capital and highly mobile labor.
The conclusions of the Classical theories are nice, especially "mutual advantage." Unfortunately, those theories have about as much to do with our current reality as the "spherical cow" of every physics nerd's favorite joke. In today's world, capital moves at a high fraction of the speed of light through wires, or even at the speed of light as radio signals in the air or visible pulses in fiber optic cables. Meanwhile, because of the fortified borders between countries and the need for passports and work visas and such, labor is basically locked into little compartments. As a result, the situation of today is almost exactly the opposite of the situation assumed by the Classical theories.
Because of this, the conclusions, like "mutual advantage," are utter bunk in today's world. In fact, there is basically nothing now preventing capital (a term I also use to refer to those who control large amounts of capital) taking total advantage of labor. So when American workers want adequate safety conditions at work, capital dumps them and goes to Mexico. When the Mexican workers get uppity and want a decent working wage and don't want pollutants dumped in their rivers, capital takes the jobs to Vietnam... etc., etc.
More relevant to this discussion, when computer programmers in Silicon Valley start getting six-figure salaries, capital starts by importing Indian programmers. When the imported Indians get wise and jump ship to higher-paying companies, capital gets smart and takes the work to India. In general terms, capital (the "2%" mentioned in the parent post) can play the labor forces in different countries against each other and pick and choose which countries' laborers will get work.
Is all lost? Maybe not. It might be possible to restore something more closely resembling the "mutual advantage" ideal of the Classical theories (though I'm sure there are some who don't see "mutual advantage" as a positive ideal and prefer the current situation...). All we have to do is restore the mobility of labor. Make the borders as open to people as they are to capital. Yes, in the short term, there would be disruptions, like a huge mass of people whose knowledge of the USA comes from Hollywood, who would flood the USA temporarily looking for that streets-paved-with-gold-and-everything-works paradise, but eventually, things would settle down again, only with better conditions for workers (read: people).
For those who worry a lot about the short-term consequences, consider that that worry is part of the "playing labor forces in different countries against each other" I mentioned above. You want to preserve the apparent advantage workers in your country currently appear to have, and capital plays on that to make you oppose the kinds of changes that could actually make Capitalism work for many people, instead of horribly failing the great majority, as it has been for quite some time.
--Mark
"It is nice to know that the computer understands the problem. But I would like to understand it too." --Eugene Wigner
With all due respect to Mr. B and Collabnet, "we saved the SF jobs" sounds like a well thought out rationalization, for a much larger problem which is ultimately destroying IT, research, and technical innovation in America.
The first excuse from companies from two or three weeks ago, was, "American colleges are not producing graduates with strong enough skills in CS, math, science, and engineering, so we are forced to outsource"..
Now we're hearing, and I bet other corporations (of Collabnet's size and position) will pick up on this, that in order to save a few jobs and the company there was a "moral" directive to go get cheaper labor.
Nobody says American companies are required to create jobs - but by outsourcing everything they're destroying the next generation of technological innovation - you saw the last wave of hackers in the dot com boom. The next wave you see is going to be a mix of MBAs and sanitation engineers - the new U.S. demographic mix.
The technical industries are far more important to preserve than say, the automotive industry, ever was. Cars burning petroleum were never going to be the final answer for the planet - we knew that since the 50s.. technological innovation is going to save the planet. Too bad it won't be coming from the U.S.
- A Chennai resident
If outsourcing to india saves jobs in the US, just think of how many jobs could be saved if we stopped criticizing sweatshops.
I mean, cheap labor = good, right?
If you want to save jobs stop paying management absurd amounts of money and start giving a shit about the health and well-being of your employees. That way maybe they'll feel good about the company and start doing work instead of spending time on the net looking for a new job because your company fucking sucks. This saves jobs because maybe then your company will actually prosper.
Or you can outsource your tech support to india and just piss off your customers.
'Sup EA.
Retrain to do what? Please name some fields that we can retrain to do that can not be offshored. And factor into your response the fact that education in Inida is FAR cheaper than in the US and that most indian grads do not near the level of student loans to payoff.
You cannot become competitive with people who make less than minimum wage.
What is needed is "financial parity". The US dollar needs to drop in value (or foreign currency needs to gain value) until it is no longer a cost advantage for companies to outsource.
All the worlds indeed a
I am really busy and my time is more valuable than I could buy outsourced developers. So I am going to start an open source project and hire India developers for peanuts. I will then put on my resume that I developed program widget and get a higher paying job.
Does this seem stupid at all levels? If it does than outsourcing should be viewed the same way. If not than maybe this is a massive shift by society and I'll have to keep the idea for my future management move...
As long as employees are not in slave labor, outsourcing is essential for many successful American companies. If I couldn't buy great quality items from China and resell them, I would have starved to death a long time ago. I am just one American guy that was saved by outsourcing. I'm sure there are many more like me.
Learn About Outsourcing. http://www.pioutsource.com
Funny, I'm from Canada, now living in New York, and people back home get surprised when I tell them how much MORE I have to pay in taxes than they do (in terms of property taxes for instance), but without getting some of the decent stuff like universal medicare and such (to be fair, NY does have some very nice programs in place, such as first time home buyers program, financial aid for studies for studies, child health plus, etc). I'm insured now, sort of, but for the longest while wasn't (and really couldn't afford anything anyway). That rather sucked. Question becomes, the state may have good stuff that I don't mind being taxed for, but where does all the federal money go to? Ummm...killing Afghani children with 2 million dollar bombs maybe?
Simplistic model.
The economy operates on satisfying the demands of others, and in turn getting your own demands satisfied.
Jim makes red beads for 6 demand units, 2 of which he spends on glass, 3 of which he spends on red dye.
Joe makes red dye for 3 demand units.
John makes cotton candy for 2 demand units.
Jim and Joe use their demand units to buy John's cotton candy.
Indian Sandeep enters the market and produces red dye for 2 demand units. Jim buys his red dye from Sandeep instead of Joe.
Jim now buys his red dye from Sandeep and has one additional demand unit to buy cotton candy from John.
If Sandeep bought cotton candy from John, then the market would have two new demand units for cotton candy. Joe could get a job as a cotton candy maker.
But Sandeep doesn't buy goods from the US, so Joe is screwed.
Do you see? Off-shoring is acceptable for the US if the off-shored workers create a market for US goods.
The free market is in transition. When the free market stabilizes, Indian IT workers will have the same demands as American IT workers, and the system will stop screwing over US workers. But while the market is in transition, Indian IT workers will be less demanding, due to the rapidly growing pool of educated Indian workers.
And it's going to get worse. The improved Indian economy will result in more money for education which will result in an expanding educated labor pool, which will result in sophisticated jobs moving to India until the free market corrects itself.
A lot of people are saying, "We'll just have to move people in the US to higher skilled jobs." Not good enough! Indian workers will eventually get all the education they need to be competitive even in the financial markets.
It's not India's fault. You need to have a global free market from the get-go in order to avoid problems like this. The free-market is self-correcting, but the self-correction will prove painful to US workers. We're talking about 1 billion people the market needs to correct for, for Christ sake.
I don't know what the answer is, but it may very well be a measured amount of protectionism. Protectionism is only good if it still permits the free market correction to occur, but just makes it gentler. An obvious and effective example is unemployment pay. Maybe we need to slow off-shoring by requiring a restricted reverse Visa... and perhaps some not-too-harsh tariffs on buying goods and services from India.
Comments?
Supposedly anyone who kicks against outsourcing is against companies being profitable. I have no problem with companies being profitable.
What I have a problem with is the fact that I'm in my mid-40's and high up in the payscale for my particular niche. If my job got outsourced, I'd like to know what these profitable companies expect me to do for a living?
So far -- as the article points out -- all the executives can tell us is "Uh, think of something."
So forgive me if I don't cheer for India's (current) good fortune. Twenty years ago, when the manufacturing jobs began leaving the US, at least The Information Economy was on the rise, and most people managed to change gears.
Today there's nothing on the horizon unless you count flipping burgers. Uncool.
Well not compared to other Americans anyway. What happens is that value of the Almighty Dollar falls as the economy weakens, becoming worth less on the global market. *That* effectively reduces your wages compared to the rest of the world, making you cheaper to employ and your products cheaper. Your pay remains at a similar level compared to other Americans. e.g. A Harley now only costs 5200GBP. That same Harley cost nearly 9,000GBP a couple of years ago.
I don't know if you've noticed but the Dollar has been falling for the last couple of years. In 2002 1 dollar would have bought you 0.7 pounds sterling (GBP) or 50 Indian Rupees (INR). Now, 1 dollar will only buy you 0.55 pounds sterling or 44 Indian Ruppees (INR). That's more than a 10% reduction in all American's wages right there.
Another example is the Japanese Yen. It halved in value during the 90s while their economy was contracting, effectively halving the wage bill compared to the rest of the world. Harder times for everyone in that economy.
Government of the people, by corporate executives, for corporate profits.
Sweden again, as an example |(I'm not Swedish, but i do think this country is the most advanced culture in the world).
A whirlpool/electrolux factory was here making microwaves, but 1 person working in the factory cost the company the same amount of money as 40 people working in a Chinese plant. So, they moved. Swedens old paper/textile industries are largely run by robots, as is thier automotive industry. All the old unskilled labouring jobs are gone, So what did they do?
They have responded as a country by doing what cannot be done in India or China. They have specialised in extreme high tech areas of work, and do shit loads of research. Biacore systems were INVENTED here for fucks sake. You can't get more high tech and shit cool than shining light at some gold to find out how much cocaine is in the blood on the other side of the fucking gold! The guy who came up with the premise of surface plasmonic resonance lives down the road from me here! This is hardcore research that isn't done in developing countries.
Or, in Ireland, they responded by making taxes on Industry a miniscule little number. So loads of companys set up in Ireland. they make a component (any component) and price it to themselves as a very expensive commodity, and pay very little tax on it. In all other countries where this company works, they pay high taxes but can pretend they make cheap components and then as a global company they save a lot of money. And Ireland gets lots of jobs and tax money. The US is a big country and it can handle itself, I'm sure it will be bouncing back in no time at all.
You know, I'm so fucking sick of hearing people bitch and complain about all of the jobs flowing overseas. You know what? Get over it! The United States encompasses less than FIVE PERCENT of the world's population. Do we have a God-given entitlement to jobs? Fuck no! Why should 80% of the world live in squalour whilst we drive around in our two-mile-per-gallon Humvees and gorge ourselves on Mickey D's supersized value meals? Short answer: they shouldn't. If offshoring means raising the standard of living for the 4/5 of humanity who have to worry about an empty belly at the end of the day, I say let it happen. I will survive.
'He who has to break a thing to find out what it is, has left the path of wisdom.' -- Gandalf to Saruman
We have seen this situation before. It used to be that only a few could go to college. Now a college eduaction is much more widespread and available. That means we need to find more ways to stand out to secure our careers and jobs. When more people went to college, it flooded the workplace with "educated" people. It was still the best and brightest (or best connected) people who got the jobs. The offshoring just opens the field more.
An answer, improve ourselves and make ourselves indespensible. This doesn't guarentee anything, but it helps to hedge out bets. When it comes down to it, skills and competency will always be needed, at whatever cost. Also, we need to make it obvious why our "local" work is necessary. Increasing personal interaction in a productive way can make a huge difference in overall productivity. This is something that can't be felt with workers around the world.
I think the offshoring is good. The only moral issue is whether you are doing what you need to do to secure your job in the face of supporting a family or that BMW. The work makes us sharper, and the exposure makes our lives richer.
If open source is good for programmers, than outsourcing is also good for programmers.
The message you got must've been garbled. Probably what Marx wants is someone to actually try his ideas, rather than use them to whitewash a power grab.
Who's that on the other line? Oh, it's Adam Smith, hoping that someone would really try his ideas, rather than use them to whitewash a power grab.
(It's interesting that "Wealth of Nations" is actually quite critical of even the weaker form of corporation that existed at the time. I'm guessing that's not in the Cliffnotes(tm).)
Invest all your money in stock you say? See the profits roll in!
So, we're at that part of the cycle again are we? Didn't this all happen before?
The United States is a third world country that hit the lottery. We were the last man standing after WWII. People bought our stuff because most of the rest of the manufacturing base in the world was bombed flat. Rather than invest that money into improving education, we squandered it as profit, has a moon shot or 4, and built a really big road system.
We are now sliding back into a largely agrarian economy. About the only thing we produce that the rest of the world wants is food. For a while it was computers, but in our absolute lust for profit we sold the production capacity to Asia for cheap.
We have a first rate University system, but increasingly our own students aren't educated enough to use them. We can spend 600 billion dollars protecting ourselves from missiles that don't exist, but we can't spend 6 cents on education without some regulatory string attached to it.
We have fine hospitals that none can afford. When my wife delivered our baby, we were surrounded on all sides by women with no insurance, who often had no pre-natal care. And that stuff is cheap at twice the price.
We have sports fields that are subsidized by taxpayers that few citizens could afford tickets to. Our schools are scraping change, but we can cut massive tax breaks for a couple of billionaires to build a new ballpark.
And hey, I am an American. Born here. Educated here. Live here. But this place is a playground for the rich. There is the resort, but outside the resort is abject poverty.
"Learning is not compulsory... neither is survival."
--Dr.W.Edwards Deming
The main reason for the outsourcing to India is quite basic at heart, their hi-tech sector is maturing later than ours did. Wages in India are rapidly rising, and once that tech sector reaches the maturity of the US, a balance will be struck between the two and some jobs will come back over here as the wage savings won't be enough to cover the other expenses of outsourcing (time zone difference, communication barriers, etc).
You are making assumptions. First anyone can educate themselves, get certified and do your job.
Second, they do have good universities in India.
Third India has a billion people, there are just as many geniuses in India as there are in the USA? No there are more due to the fact that theres greater numbers of Indians. To assume you have the benefit of being upper class which allows you to be lazy is a big mistake. Just because you from birth may have more money and better schools does not mean someone cannot out work you and reach the same point. We have kids finishing college at 14-15 years old who are minorities and in the USA. Competition is going to be fierce and thats good.
People don't exist to serve systems, systems exist to serve people.
...came about from a variety of reasons. This is complex, but I'll hit a few points.
Originally, in the US, corporations had a duality they were forced into, they were granted charters to incorporate-it wasn't automatic, and part of the deal from government was that they had to be of the public benefit-inside the united states. Profitability was one thing and taken as a gimme, but the other applied as well. That's just historical fact. If the company failed to stick to that, their incorporation charter wasn't renewed or it was pulled. The united+states was a federation of (much more than today) independent states, so we had a "common market" that had a default language and used a common currency, and the tax structure was setup to insure that the economy as a whole *inside this federation of independent states* improved, and there wasn't as bad a currency drain to outside the borders. We still had trade with other nations, but the default was it had to improve THIS nation over-all, and not replace anything domestically. Excise taxes at the border were a part of this, and why we didn't have the onerous "income" tax. There WEREN'T income taxes. We had protectionism by default, for the nation as a whole, but states weren't allowed protectionism legislation, only the federation.
We then gradually realised that monopolies stifled trade, so controls were put into place. We also had the phenomenon of collective bargaining finally being allowed, so that gross exploitation didn't occur, and that general over-all standard of living increased as more and more people as a percentage of the gross population had disposable income, could save for retirement, could afford even beyond basic necessities, and etc. During this time, we also used a currency that was backed by tangible assets, and was productivity-based, not credit-based.
Once all those were in place, we had the fastest and most successful rise of a true middle class that the planet has ever seen. It worked, it was a combination that worked, and most of it was based on common sense, nationalism, and yes, morality.
That's all gone now. It's based on greed again, exploitation, no thoughts of being loyal to your nation or your neighbors.
I EXPECT an Indian or a Chinese to be loyal and patriotic to their respective nations, to be looking out for the best deal they can find, it is the natural order of things and I approve of that, it just makes sense. I EXPECT that of a USian as well. The argument now is, is that it doesn't matter, nothing matters other than short term profits. No long range view of what is happening to your (anyone your, speaking generally here of course) nation or your neighbor. It's also pretty short sighted. Put your neighbor out of work, you've lost a domestic customer for your widget or widget service, as they have no money now. In the US now they have to cook the books and outright lie to keep true unemployment figures out of the mainstream press. Put enough of them out of work you have a national balance of trade deficit, which is the largest in our history now. We had a domestic balance of trade surplus for our entire existence as a nation UNTIL corporations got given tax breaks to outsource, and it's recent in historical terms. Continue that for a number of years and your nation is forced as a stop gap matter to abandon asset and productivity based currency to a complete fraud lying debt-based inflationary currency. this has happened, and was inevitable when we abandoned asset based currency. That is for sure happened, it's undebateable here.
Shipping off your carefully built up manufacturing base means that some other nation or group of nations can hold you hostage at some point for critical infrastructure. that's happened. Shipping off your agriculture means the same. This is also true now and accelerating. Allowing the rise of the monopolies, the same, it's happening.
*True* wealth is a bona-fide tangible, despite the bankers and casino traders assertions otherwise.. True wealth is refl
Why not analyze the flip side of outsourcing. I am a software developer who is about to be "bangalored". Fine. I am not going to pout about it. The media writes that we are in a "global economy" so deal with it. OK I will. But we should take the global economy one step further. If US corps. can offshore their labor, allow US consumers to offshore their consumption. For example, if Pfizer Pharm. can offshore its IT staff to save money, then I should be able to purchase my drugs from Canada or Mexico to save money. I would like to see how IBM would react if I could buy an imitation Thinkpad laptop from Singapore for $300. US corporations are lobbying for the right to offshore yet also lobby for protection for their products. I say make it fair. If you want free trade, you should feel the sting a free trade. Allow US citizens to buy goods directly from countries with lower costs of living. I guarantee that offshoring consumption will make the big US corps. whine and pout and hopefully, the outsourcing proponents will deliver the same message that you are delivering to the US IT workers that are getting laid off. Free trade is good for you. It's a global economy. Deal with it. The threat of duty free imports will make CEOs rethink their offshoring strategies.
So, considering the Caste system still exploits nearly 200 Million people - called Untouchables -- treated as virtual slaves by their caste superiors, its nice to see American Capitalists praising India for its Capialist Victories.
The trouble is simple, there are many many poor in India. They are many educated intellectuals, and a growing upper class. YET they still have teaming masses of poor. I can gaurantee you that India's poor will not tolerate the this -- India is a Secular Democracy -- and its people can see the "promise" of Capialism for what it is: Extending the domination of the Upper Class.
In a global context, the USA is the Upper Class. The rest of the world is being (via propaganda like this, WTO treaties and open Warfare(justified time and again by self-serving lies, but still never comes close to excusing the Imperial Warmongering Aggressors to anyone with perspective, a lack of jingoism, a bit of history and a mote of objectiveness) taught a lesson (and sold a noble lie) either continue to serve our economy or face conequences. The DOMESTIC US middle and lower classes had better wake the heck up -- only you will prevent the US plutocrats from extending their Empire over the world. If you dont, these (cluefull) foreign masses *will* eventually kick off their yokes. Inspite of all this flower-y "India as proof of Capitalism" propaganda. The only thing it is proof of, is that YET AGAIN, USA's Plutocrats will make league with ANY CORRUPT system that will butress their status... Saddam, Shah of Iran, Gen. Zia ul-Haq of Pakistan in the 1980's (who helped nurture what later became Al Qaeda), Gen. Suharto in Indonesia, Mobutu Sese Seko in Zaire, Ferdinand Marcos, and and and. Obviously the American people DO NOT CARE about justice and democracy in the world as long as they Can Get Rich.
So when you middle and lower classes in the USA finally realize that "Free Trade" really means "Tolerate sinking living conditions at home, so we can finance the extension of our empire and underclass-serfs, so we may get stinking rich or else be hungry today." than we can discuss what the implications of Free Trade with India's wonderfull New Capitalists.
It is ironic that India that succumbed to a single British corporation - The East India Trading Company - should be seen as savior of capitalism. Here is the classic example. Indian weavers and cotton and silk was some of the best on the planet. The Egyptians mummies were wrapped in Indian muslin (ends in an 'n'). The British at the onset of their Industrial Revolution had no consumers for the crap their power looms produced. So the East India company kills Indian cottage industry, takes away Indian cotton to England, processes fabric and sells it back to India. Some percentage of that fine industrial age English middle class must have immigrated to the United States.
It is not much different today. The iron ore produced in India gets shipped to Japan to come back as automobile engines, the GSM chip designed/QA'd locally comes back as Motorola cell phone etc.
Morality? Gimme a break.
It's the "Ant and the Grasshopper" story. During the boom, many people with high paying jobs purchased expensive house, SUVs, boats, and various other toys and got into even more debt. When the bust happend and their last their jobs, they blamed everyone except themselves. Meanwhile, the "Grasshoppers" saved their money and bought stocks at dirty cheap prices during the bust.
1f u c4n r34d th1s u r34lly n33d t0 g37 l41d
It applies to software, and here is a similar one:
In the economy, you are the following 3 things:
1) a consumer
2) a investor
3) a worker
Now pick two. What's good for those 2 choices may not be good for the remaining one.
Currently, it's number 1 and number 2.
Speaking of India. I hear there's a remote village there where if one person in the village gets something special - everyone gangs up on him and takes away whatever they can for themselves. Needless to say, instead of everybody striving to get alittle something, everybody ends up with nothing.
Unfortunately many have that problem here in the USA too - and isn't it ironic that of all the poor people who have migrated to the USA, the demogaphics that want to tax the rich the most are the ones that consistently end up remaining the most poor.
The worst part is that people are so green with envy that they don't realise that our tax system doesn't even tax wealth - it taxes income. That means the guy sitting on a billion worth in assets will barely even notice a tax increase while the small business person who busts his ass to earn his first 300K will get his teeth and nuts kicked in. Not only that, but the billionaire will get more tax deductions to boot - WTF do you think the Kennedys want to "tax the rich" for the sake of the little guy?
Taxes don't hurt the rich, they hurt the little people who are trying to become rich.
If you look at this story you will see the real issue. US companies going overseas and hiring workers, and making profits on those workers, don't have to pay tax on those profits.
That's a losing proposition for American workers. I know some web designers who would have accepted $20k/yr to do work, if they could work from home. THey had broadband, there was no functional difference between them and the Indian worker. The problem is, corporations can hide profits made my Indian workers and skirt paying taxes, and all the other hassles American workers have with them, such as employment benefits, the paperwork associated with W2s. You can write a single check to an outsourcing firm overseas. Anyhow, read the Yahoo article.
Bush doesn't care, he'll give US corporations anything they want, any tax loophole they can find he will support. The middle class is destroyed, and so you will need business skills and the ability to create an LLC and be an indepedant IT consultant to make it, because nobody will hire you.
Outsourcing is nothing more than a natural market reaction to overpriced labor in certain areas of the economy. It is clearly in the interest of corporations to find the cheapest labor skilled enough to do a job. Outsourcing is a market-driven hint to some in the labor pool to expand their skills, find new opportunities, invent, completely change career paths, or otherwise find a way to make themselves valuable.
According to the Bureau of Economic Analysis, the US enjoys a trade surplus in services, to the tune of $60 billion. A large portion of that surplus is computer services. This bears repeating: we import more programming/analysis/consulting than we export. The the overall service balance is shrinking, from $64B in 2002 to $60B last year, but is still a large surplus. The shrinking is easy to explain: as more nations/laborpools develop the skills to do certain jobs, companies are given greater selection. Salaries in the computer services secotr in the US will trend downward, while they will be pulled up overseas. They will meet in the middle somewhere
Not all jobs will be outsourced. There will still be many jobs, especially in emerging markets, that cannot be outsourced because laborers overseas do not yet have the skills needed to do the jobs. This is a great opportunity for those left without a job to improve their skills and enter these 'safe' markets.
There is no sence in complaining about outsourcing. "Evil" corporations are going to do it whether you like it or not. Government protection is not the answer, mainly because it isn't the government's responsibility to ensure you have a job. That onus lies on you. If you are unemployed, stop reading Slashdot and find a way to be valuable to the economy. Self-reliance, innovation and hard work are what made this country what it is and will continue to keep it great.
As the US labor pool is forced to become more skilled, the standard of living in countries like India will rise, creating a larger market for US produced goods, thus creating more jobs is the US.
I repeat: THE ANSWER IS NOT GOVERNMENT HANDOUT, SUBSIDY OR PROTECTION!!!! IT'S AMERICAN INDUSTRY AND HARD WORK!!!
People who didn't buck up got laid off and replaced with people willing to work 80-100 hours per week.
I'm sure my friend would have something to say on the matter, but s/he doesn't have time to read or write to /.
Names and genders have been obfuscated to protect the already tenuously employed.
The CB App. What's your 20?
mostly any american clothing, you have no moral right to whine about outsourcing.
Oh wait, outsourcing is good when it isn't YOUR kind of job being outsourced, is that what you're really saying? tough luck.
i had a sig, once..
Labor is no different from any other good. Americans happily reap the benefits of cheap imported products, yet are outraged when firms do the same with jobs. This is not to say that firms have license to act amorally and disregard the impact of their decisions on real people; in fact, people--American or otherwise--will benefit most in the long run from open borders and free trade of all goods, including labor. At the very worst, offshoring is merely a short-term "growing pain" of the global economy. Realistically, it is a desirable step in that direction.
Companies for profit are morally a bad thing. These are not states of nature, they are socially constructed concepts.
Commodification of labor is fundamentally unethical and the real term, alienation, should be used whenever possible.
Farmers should farm to feed people, programmers should code to produce software, and automakers should assemble to produce cars, all of the above for people to use. Instead, each of famers farm for money (and the crops are merely another irritating step, much less the consumer), programmers code for money (and the code is merely a laborious inconvenience, much less the consumer), and automakers assemble cars for money (and the building a quality automobile is merely another tiresome stage in the process of acquiring money...)
You say "money is the root of all evil" and people treat you like you are saying something quaint and simple, but in reality, it's not far from the truth. Consider this analysis from one of the most preeminent social theorists of our era:
"Political economy, this science of wealth, is therefore simultaneously the science of denial, of want, of thrift, of saving -- and it actually reaches the point where it spares man the need of either fresh air or exercise. This science of marvellous industry is simultaneously the science of asceticism, and its true ideal is the ascetic but extortionate miser and the ascetic but productive slave. Its moral ideal is the worker who takes part of his wages to the savings-bank... Self-denial, the denial of life and of all human needs, is its cardinal doctrine. The less you eat, drink and read books; the less you go to the theatre, the dance hall, the public-house; the less you think, love, theorize, sing, paint, fence, etc., the more you save -- the greater becomes your treasure which neither moths nor dust will devour -- your capital. The less you are, the more you have; the less you express your own life, the greater is your alienated life -- the greater is the store of your estranged being. Everything which the political economist takes from you in life and in humanity, he replaces for you in money and in wealth; and all the things which you cannot do, your money can do. It can eat and drink, go to the dance hall and the theatre; it can travel, it can appropriate art, learning, the treasures of the past, political power... All passions and all activity must therefore be submerged in avarice."
STOP . AMERICA . NOW
The problem isn't that Indian coding droids are getting jobs. The problem is that American workers are losing jobs to overseas labour simply because they cost less. It's not that the Indian droids are any more skilled (The article quotes somebody as saying they are indeed less skilled), it's just that they work for next to nothing.
You imply that there is some sort of entitlement issue here. If this were indeed the case, why don't you hear more about the native Indian IT industry? Why can't they compete with products, rather than simply the ability to fill a job for less money? (Yes, it is conceded that there IS a native IT industry in India, but that's not at issue here)
This, of course, is what the company profiled in the article seems to be driving at. Great, kick off a native industry in-country. Launch Indian-made software products to compete in the market. Great, more power to them, and good luck! That's how it should work.
"These people look deep within my soul and assign me a number based on the order in which I joined" --Homer re:
Unless I am mistaken, all of this can be reduced to an imbalance between living standards and consumption in the East and the West. Because the West has higher living standards, (ie, more expensive), it will always be less expensive to hire labor in countries like India and China.
Only when everybody has approximately the same cost of living and consumption standards, will labor cost the same across the globe.
The problem is that there isn't physical space or resource for the few BILLION people in India and China to industrialize out of their mud huts up to the same standards Americans have grown to expect. And guess what? The result will not be one of everybody being pulled up by the bootstraps in cheaper, overpopulated nations, but rather a natural decline in the American standard of living.
This (of course!) is unacceptable. And so you suggest that we here in the West stay ahead of the game through "Hard Work and American Industry" (Who wants to live in a mud hut, after all?)
The only problem is. .
This isn't going to happen. Unless somebody invents a really kick-ass widget which nobody can produce off-shore, the American dream is in for a rude awakening. Heck, we reached peak oil production a few years back. What do you think will happen when every Indian decides to buy an air conditioner and a refrigerator? The petri dish is getting tight and we're nearly out of nutrient agar. And THAT is one of the big aspects of what this latest world war is all about; consolidating resources.
Conservative economic dogma is fine for a planet with infinite growth curves and resources, but this ain't SIMS, my friend. Unless you're in with Bush and the other Bunker Boys, you're going to hurt along with everybody else.
-FL
This seems to be primarily a debate on other countries with massive populations finally being able to claim an equal proportion of the worlds resources.
America has a large share of the world's land with a much smaller proportion of the population. The benefits of this agriculture, natural resources, are the first order advantages enjoyed by the US. The mechanism of free-enterprise, and the risk-taking mentality in the have created second-order benefits which the US is enjoying today. Also, the vast separation from the rest of the world, kept the US industries standing after WWII, allowing th US to supply the rest of the world.
Now the massive population in the rest of the world has finally become a market that is worth serving, and is clamoring for resources proportional to their numbers. The US having used an enormously large proportion of the world's resources so far, is going to find itself using a smaller and smaller proportion of these resources and going back to the first-order advantages.
India and China, with their huge populations, will be able to do any service jobs that don't require actual physical presence at a much cheaper cost. The only platform on which americans can compete is their incredible efficiency, learnt over many decades. However, IT provides much of this efficiency, and can quite easily be transported anywhere in the world.
As trade between the rest of the world increases, trade between the US and the rest of the world will become proportionally smaller - except in key IP areas, where the US still enjoys a large knowledge monopoly, and agriculture, where the US has the advantage of area.
This is different from the previous scares (Japan, China etc.) as it represents for the first time, the benefits of a countries huge population, as opposed to the benefits of a small population.
The US should try to compete by growing R&D, getting and keeping knowledge workers, using NASA etc., as a springboard to newer techs, which the developing nations can only dream of.
Sorry for the long ramble... I hope some of the comments will be able to get some clarity from this..
All bow to his Noodliness!! His Noodle Appendage has touched me!
Da Blog