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IBM, Other Multinationals "Detaching" From the US
theodp writes "If you're brilliant, work really hard, and earn a world-class doctorate from a US university, IBM has a job for you at one of its US research sites — as a 'complementary worker' (as this 1996 piece defined the then-emerging term). But be prepared to ship out to India or China after you've soaked up knowledge for 13 months as a 'long-term supplemental worker.' Newsweek sketches some of the bigger picture, reporting that IBM, HP, Accenture, and others are finding it profitable to detach from the United States (even patenting the process). 'IBM is one of the multinationals that propelled America to the apex of its power, and it is now emblematic of the process of creative destruction pushing America to a new, less dominant, and less comfortable position.'"
Instead of blaming them for leaving, why don't we stop chasing them away?
We have the lowest effective corporate tax rates in the world for a developed nation. That still isn't enough I guess. American justice, American greed. Maybe if we stopped doing stupid shit like invading Iraq and keepng bases all over the world we could reduce that tax rate even further! But they'd still leave for a cheaper place.
And your point is? Maybe we should prohibit these businesses from operating in the states. Oh wait, that's why they're leaving. . . And that's the problem.
Patriotism is a highly overrated trait in anything/anybody. If it's better to leave, why stay?
They are multinational corporations... what kind of national loyalty are we expecting from them?
They behave exactly as legislation allows them to behave. If you don't like it, change the legislation.
Reduce the tax rate but eliminate loopholes.
Or, we could close up all those expensive shit-stirring military bases, stop the failed wars (oh Korea and Vietnam, I wish we had learned from you..) and cancel social security, medicare and medicaid.
Blar.
Large corporations are not good citizens and care little about the welfare of the nations that created them. I've heard them described as sociopathic is nature, which is probably quite an accurate description. They rarely have any long term vision in most cases and only seem to look a quarter or two ahead to make investors happy. Limiting their greed just slightly compared to their competitors might earn some good will in the future, but even that seems to be beyond most corporations.
The future is China, not the USA, and IBM knows it. So do GM and other multinationals.
Why on earth would they remain chained to a sinking ship? That makes no sense. American labour is more expensive. They're heavily regulated. The supply of highly educated people in the USA is drying up, because all the people with advanced engineering degrees are from China and India.
This is not a surprise. It's the actions of a rational entity acting in its own self interest. The USA is rapidly decreasing in international importance, so *of course* they are trying to shift elsewhere.
Nothing to see here. Move along.
That's all well and good, but we are taxing small businesses into oblivion, and it's only going to get worse.
The Egyptians complained about the English "stealing" their cotton spinning and weaving business. The English complained about the Yankee New Englanders, who complained about the Southerners, who complained about the Mexicans, who complained about the Malaysians who are complaining about the Chinese and Indians.
When I say "complained", I mean passed laws and regulations, imposed sanctions, taxes and duties, fought wars, battled smuggling, and whined.
In the long run, the laws of econonics ALWAYS win. The US should fix the causes, not the symptoms.
Prove anything by multiplying Huge Number times Tiny Number
that any factory or venture in China must be at least 51% domestically owned, such that they always will have the power?
Can't help but think that all these companies are building up their own competition... when China decides the dollar isn't that great anymore and that they've sucked out all the knowledge needed of the US and other 1st world countries to be on par with them.
Not that US companies alone can be blamed, the US consumer, with their rush to the cheapest priced options, by and large, contributed to this cycle.
The fact is that Obama is a redistributionist who claims that jobs are owed and not earned. Sorry, but that kind of attitude is what's driving employers away from the USA. You wish you had a girlfriend/boyfriend? Then make yourself appealing, so that someone will want to hook up with you. Don't go talking about how having a significant other is your inalienable right, somehow owed to you by society or other unspecified parties. You wish you had a job? Then make yourself appealing and more competent, so that someone will want to hire you. Don't go talking about how somebody else is "stealing" "your" job, as if a job is somehow owed to you, regardless of how incompetent you are.
Obama is consistently talking about "American jobs" as if the jobs are rightfully American. His political stance is well known to be re-distributionist. Start earning, and stop whining for a handout.
The best thing we could do if we don't want IBM and other companies going abroad is what John Doerr and Thomas Friedman have suggested:
Because it's often difficult or impossible to import international engineers and scientists with valuable or unusual skills to the United States, the logical alternative is to go to where they are. Want this kind of behavior on the part of IBM and others to, if not stop altogether, then at least to slow? Implement Friedman's suggestion. Otherwise, don't implicitly (or, in the case of many commenters on this thread, explicitly) complain when companies react to the conditions that politicians, and by extension voters, have placed on them.
In 1965 Canada brought into law the "Auto Pact" ahref=http://www.canadianeconomy.gc.ca/english/economy/1965canada_us_auto_pact.htmlrel=url2html-14781http://www.canadianeconomy.gc.ca/english/economy/1965canada_us_auto_pact.html>
It basically states that for every car bought in Canada, one car must be built in Canada.
(In 2001 it was abolished because it infringed on NAFTA.)
This policy works for everybody except the greedy CEO's. Any manufacturing industry could be converted to this setup.
"The price good men pay for indifference to public affairs is to be ruled by evil men." ~Plato (427-347 BC)
Because the stuff that's "chasing them away" is the same stuff that still nominally keeps the American people from being totally subjugated and destitute like the Chinese and Indians are.
What makes you think that's achievable? Americans are competing with Chinese and Indians. What possible reason would there be for anybody to pay more to an American worker than to a Chinese or Indian worker?
Companies aren't going to stop leaving the US until we are so broken by their flight that we are forced to become fascist.
Companies don't care about fascism. We just need to become cheaper, or we need to help Chinese and Indians become rich.
Isn't the real fix that we improve the countries they are outsourcing to until the economy there demands the same as US salaries? At that point geography becomes the benefit instead of dollars and they want to hire the guy closer to "home."
-Xen
So after they move out what will keep them doing to the US what they do to other countries - exploit countries resources for profit. As we were the home to these greedy groups we have been pretty much insulated as they didn't rock their own boat. But if they are based outside of the US, kinda cleans off that slate and opens us up as a whole new market to exploit, don't you think?
"Enjoy what you're doing! If it becomes drudgery, you're doing it wrong!" - Jim Butterfield
We totally shouldn't have government regulation. Except for the fact that pure capitalism tends to exploit children, exploit workers or both.
I'm all for free trade and as little government intervention as possible, too. But capitalism is all about short term gain regardless of the impact on the people or the environment. It's human nature that's got us screwed.
It's the main reason the ideas of The Long Now Foundation are so interesting.
I find the fact that corporations such as this, especially in a time of economic hardship, are basically harming american workers and showing such contempt for the USA, to be greatly offensive and angers me to no end. i think its time that we detach from china and india which has basically decimated Americas economy and who have stolen our jobs. I think its clearly time that we need to stop allowing these companies to abuse the USA looking at it as only a market to sell their overpriced chinese crap, and start creating jobs here again. Globalisation is such a big scam its ridiculous, its destroying this countyr and allows these greedy companies to basically exploit slave labor in china. The US should and can, and must for its survival, implement a tariff on imports of cars, textiles, furniture, IT services, customer service calls to India and China, etc, and so on. When we have 15% unemployment in reality and people struggling to find work the notion of any company moving jobs somewhere else really should cause a revolt from americans and demands to implement tariffs. Its time to get past this irrational hysteria about tariffs. Tariffs are good and can help this countries economy rebound. There is nothing wrong with it since it simply allows americans to make products for other americans. Think about it, why cant the chinese make things for other chinese, and americans make things for other americans. it would be better for the chinese of the products that chinese workers stayed in china to benefit to the people there. It would be better for americans to create more jobs in the US making products for use by americans. The only people that globalisation benefits is the wealthy rich elite corporations who important products made by employees in slave labor camps in china making a few cents an hour, living in filthy dormitories, who are treated in the most inhumane way, beaten, and even not allowed to use the restroom, with litany of human rights abuses, the products these slaves make are then sold off at a 100% markup in the US and the wealthy elite take the profit. Both the american and the chinese worker are the losers. Globalisation is what has allowed as well corporations to basically dictate to countries basically how they will treat workers and the environment and rewards countries which allow their environment and workers to be ruthlessly exploited by massive global corporations. This is a system where massive global corporations get their way and make the laws through making countries compete against each other to see who can allow their employees to be treated in the most inhumane way. Through the global consolidation and globalisation the corporations are able to control markets resources, jobs, and so on in many different countries and operate as sort of transnational governments. Through this we are seeing a new world order emerge where the governments of countries are simply puppets of a powerful fascist global corporate order who controls wealth, resources, jobs, markets, capital, etc.
If we value our freedom, we need to implement tariffs which would give our own worker welfare laws, our own democratic state, some force and allow us to implement unions without the corporations threatening to move jobs to other countries. If you want to be treated like a decently like a human being, to have a good life and to be paid decently for decent work, we desperately need to implement broader democratic unions which allow employees a democratic vioce where they can act as a safeguard against mistreatment and slave wages. Unions are essential to our economic recovery and for stopping the destruction of the middle class. The unions built the middle class in the USA and ironically created a middle class that had the spending power which made companies like IBM so successful. Unions are essential for workers to have decent wage since it more often than not is the tendancy of corporations to pay workers as little as they can, leading to a vast impoverished state in the economy. Its just shocking and disgusting tha
Good point. Their labor is often cheaper because they poorly regulate:
* Pollution
* Safety
* Child-labor
* Working hours
* Paycheck laws
* Etc.
Should our goal be to compete with slaves, or end (de-facto) slavory?
Table-ized A.I.
I'm pretty sure the land that my California home sits on hasn't enjoyed a history of unbroken legal sales since biblical times. Do you really think there's any usable land on Earth that hasn't been stolen at least once?
Sure... that was the case before the existence of the multinationals... Their power and influence is used to destroy the framework in which they were created and could go beyond national borders, to become multinational entities.
Laws that protect us from this kind of behavior add costs that push companies to these countries.
And here we find the weakness in capitalism — the tyranny of the masses, who want cheaper and cheaper DVD players and disposable razors, and don't care how many twelve year olds have to work in sweatshops to deliver them. (Me too. I'm trying to be better, but my habits are very bad. Like most of us.)
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Yes, but it's to try to reduce the effects of previous administrations policies, namely an economic meltdown.
Or do you believe Bush would have behaved significantly different (eg, they would let GM, other banks, etc.. fail)?
Sleep your way to a whiter smile...date a dentist!
...is falling apart, daily. Entire states are broke, even our richest state California is broke. They are having to close down a lot of infrastructure, give public employees furloughs, dump prisoners, consolidate prisons, etc, and it keeps getting worse. Local hospitals and local school systems are broke all over the nation *now* and it is getting worse. Thousands of local governments are broke or near broke. Millions of people are facing foreclosure and one estimate is half of all homes will be "underwater" in terms of what they owe as opposed to what they will really be worth within a few years now. Daily we hear about more and more jobs going poof, just like in this article. States and local governments get taxes to pay for your civilized infrastructure, and we have half a million jobs a month going poof. People who can't afford their house note are not going to be paying local property tax, and if they lose their job, not be paying any state or federal tax either.
Your quote, then, in my opinion, "We are never going to drop to their level of poverty because we have things like running water, a strong infrastructure, and plentiful high quality housing. These are things that won't go away, just because of outsourcing."..is *wishful thinking* to the extreme, because there's nothing whatsoever stopping all this civilization we have developed for generations now here from further deteriorating as long as we are losing 100 jobs to one gained, whatever the lopsided figure is, and government tax payer jobs are not the answer there either.
Government jobs cost the nation wealth, they don't create wealth. We need real civilian sector middle class wealth creation jobs, not mc jobs or telephone sanitizing "service" jobs or government busywork bureaucracy jobs (or all those ludicrous "homeland insecurity" paramilitary jobs), and those are the type of jobs we have been losing, the wealth creation jobs. You have to have wealth creation jobs, period. Lose them, your civilization will collapse.
And it can and most likely will get a lot worse here than it is now, and it is precisely from the last couple of decades of heavy offshoring for fast cheap labor arbitrage designed to make wall street richer and everyone else poorer (in this nation).
Your attitude (anyone you) changes fast once you lose your home and job, etc. It stops being theory.
Not sure how far you are willing to drop down in lifestyle, but to match a lot of the developing world, you should be using a privy out back, be walking a few miles to the town well and carrying the water back, raising a lot of your own food immediately around your house, etc. Plus working 16 hour shifts in some dismal and highly dangerous factory for a few bucks a day..but still be forced to pay all US costs.
That's what you are saying, so I'll counter it and say it can't be done in the US, hence why I said wishful thinking.
I know I live as cheap and mean as possible here, probably a lot closer to developing world status that most people on this board, my income is slightly less than ten grand a *year*, and I couldn't live on 5 bucks a day, it just isn't possible unless you are out living totally wild and scrounging your food mostly. Any sort of shelter with electricity and running water, etc costs a lot more than that. I think I am at the bare minimum now, and we grow a lot of our own food, drive ancient vehicles and those only once a week, spend zip money on entertainment or restaurants, etc. Cheap, not third world, but second world status and you STILL need to have some decent cash coming in to exist here.
No job..then what, what do you tell people who just lost their middle class job to offshoring? "Tough crap, sucks to be you friend, just magically exist somehow...just think how cheap the goods at walmart are though!!"
Really, what are you willing to say to someone *in person*, face to face, who lost their job to offshoring, haven't found another job
These companies never 'detach' from the capital and credit markets that they need to stay in business. They enjoy access to free and fair markets supported by the U. S. Constitution. Investors and lenders to such companies depend on financial and accounting standards along with required public disclosures of financial information. When someone threatens to steal their IP or violate a contract they are a party to, they expect access to a fair and impartial court system backed by a stable political system. Let's see them 'detach' from those things...not likely. Being located in the United States is an enormous advantage for these companies and they know it. They just don't want us to know it.
In particular, India and China having their money fixed to ours. If not, then why not Europe or Russia? The simple fact is that IBM, GE, and others are exploiting the fixed money difference and the west is allowing itself to be destroyed. Unless the WEST decides to work together to stop these nations from having an unfair advantage, then there will NOT be a fair competitive market. And without that, more and more IP will simply flow to these nations. Keep in mind that BOTH china and India are pushing to obtain all of our IP related to tech (such as nukes or military or tech or pollution control, etc) and are simply stealing it if they do not feel like paying for it.
I prefer the "u" in honour as it seems to be missing these days.
All wealth stems from theft either now or in earlier eras.
I see, so when I am the best at building widgets, and you buy one of my widgets because
it is good quality and worth the price to you, this is theft?
Oh, I get it, I should *give* you the widget just because I have many and you have none. Even If I had
to buy materials and spend time to make the widget, I am evil, mean and nasty to not just give you one.
Manufacturing is one thing, but the software developers at IBM's China Development Labs aren't known for giving kids lead poisoning, and they still have plenty of "offshoring" hate. I don't think there's too much "exploitation! sweatshops!" there either.
The World Wide Web is dying. Soon, we shall have only the Internet.
Regarding your example, England and the US South wanted free trade with each other, with the backwards South supplying raw cotton material to industrialized England for processing, while the US North wanted "laws and regulations, imposed sanctions, taxes and duties" to protect its growing industrial base. The result of this was a civil war in which the industrialized north beat the rural south (a south which couldn't trust a quarter of its population). Afterward, the sanctions and duties only increased. What was the result of this? Today the GDP of the US is five times that of the UK.
Palestine was under British control,
Just about the entire middle east was under British control. Oh and "palestine" meant the Roman Province called "philistine", meaning Israel, Lebanon, most of Syria, and sizeable parts of Iraq, Egypt and Saudi Arabia.
And IBM may have helped with the holocaust, but the project they signed on for was the administration of the national health care system of Nazi Germany. Of course that was the project that turned into the holocaust later. I know it's important for "tolerant socialists" to believe that Hitler was conceived in a black mass by 2 goats fucking eachother in hellfire, but in reality this was an unremarkable guy, who started out working hard and trying to help his country. Later he went into politics and pushed a form of centralized economy that used to be called "socialism" (as opposed to (bolsjevik) communism) and is today known as "fascism". The component of the ideology that lead to supremacism and the holocaust, eugenics, can be found in any history book under socialism.
Until late 1941, Hitler was known as the man who made socialism acceptable and possible in America, or more affectionately the "Champion of the poor". He was nominated for the Nobel peace prize, and was the recipient of numerous press prizes on promoting peace, fairness and, especially, equality.
End free trade with non-free countries, or try communism! buy Chinese!
-edfardos
This has nothing to do with socialism, tax structure, or unregulated capitalism. IBM has stopped to innovate, the only way they can show any profits is by screwing over its employees with no long term strategy in place. They want to look good next quarter, and that is all they care about. The only way they can show any profits is by shifting their work force to cheaper labor markets. They have nothing new to sell, just have to maintain existing crap.
Are you serious? Obama's placing the cost of the Iraq and Afghanistan wars on budget is some sort of devious conspiracy while NOT placing the war on the budget was some sort of principled stand by Bush? I thought Bush didn't put the cost of the wars on the budget because Rumsfeld convinced him that we'd pay for it all with Iraqi oil revenue.
Waltz, nymph, for quick jigs vex Bud.
Neo-conservative != fascist
See if you can recognize the following characteristics in today's Fox News/Jeff Beck/Rush Limbaugh followers in the following list (note especially point #3 in regard to the parent post):
This and no other is the root from which a tyrant springs; when first he appears as a protector - Plato (423 to 327 BC)
As a fellow economic genius I have a few thoughts:
1.) Buying cheaper is more expensive.
We the consumers are as much to blame as the large corporations. The point is we are willing to buy the cheaper product to save ourselves money. There's nothing inherently wrong with this however we are thinking in the individual sense and not looking beyond the purchase and asking questions such as "How can they make this so much cheaper?" We just want cheap crap we can throw away later so we can buy more cheap crap (repeat over and over) which actually costs us more in the long run and fills those companies pockets.
2.) You need a babysitter?
We want the Uncle Sam to totally control how these companies operate however we fail to realize that we have the purchasing power. You don't need to be protected from buying from China or elsewhere. Make the decision on what to buy from where and whom. If nothing fits what your looking for then here's a thought: Stop buying shit. What could take months to years in the political arena can be accomplished instantly by you making a decision while your in the store. What happened to personal responsibility?
3.) The Chinese work hard.
Yea, I said it. The average Lee over there is no different than over here. He or she is just trying to support their family and put some food on the table. Would you let your family go hungry for someone else in another country? Deep down I doubt it because I know I wouldn't. Thus I can't fault them for it. If you want to turn your anger somewhere turn it at the guys lining their pockets with fat bonuses and those employees putting in the bare minimum and expecting premium wage.
4.) Our students need to not be stoopid.
I work and attend a college (no, I'm not the janitor). Everyday I hear students complain about how hard they have to study or how they can't wait to get shit faced. Yea, that's the way to go. Go ahead and burn some brain cells that won't come back.
They study to pass tests but not to learn the material. They complain about teachers trying to "over teach" them. We're so obsessed with having a society with individuals that have degrees that the quality of the person (by quality I mean someone who actually is willing to work hard to learn the material) getting it reduces its true significance. And a degree is only a meaning. That piece of paper doesn't make you more intelligent, it just means you know how to study for a test and do homework. Anyone can memorize things. What matters is your passion for learning, and your ability to take those memorized facts and use them in an abstract manner to solve problems that don't have answers yet. Your goal shouldn't be graduation but graduation as an effect of you mastering the material.
Why the rant? Because these same students who hate to learn and don't have a passion for knowledge take this same approach in the work field but have some sense of entitlement about them. When they can't do the job and get fired they blame the gov, the minimum wage guy from China, and everyone's momma. I would think our present situation would make students want to buckle down and give China something to be envious of but I still see students complain about how long their class was. Maybe China does deserve it more...
Oh please, economics is NOT is science in the same way as physics and chemistry. It does not have hard and testable hypotheses. Its predictions are always approximate, and are seemingly rarely falsified, largely due to their vagueness. Most economic theories are inwards looking and self-referential. The theories are logical based on a certain set of assumptions, but those base assumptions are mere speculation.
I like to look at economics as a useful tool. It may have some preductive utility, not unlike technical stock analysis. But it certainly shouldn't be used as the main guiding force by which to operate a society. I believe that the fundamental flaw of economics is that it seeks to make predictions about phenomenon that are largely psychological. In the end, market behavior is based on psychology, on desires, on fears, on needs. To assume that we can reduce such a massively complicated thing as fear to a simple set of equations is ludicrous.
This and no other is the root from which a tyrant springs; when first he appears as a protector - Plato (423 to 327 BC)
First off, the assertion that the New Deal propelled America into a period of rapid economic growth is ridiculous - the economy remained in a depression until the onset of WWII.
If you look carefully at the data the economy ebbed and flowed as Congress tampered with the New Deal. When in New Deal policies were going strong, the economy improved, when Congress resolve weakened and moved away from expansionary policies the economy took a downturn. Would the great depression come to a swift end without WWII? perhaps not, but clearly it was ameliorated by the New Deal and worsened by whenever anti-New Deal actions took place.
Back when I first read Gibsons novels I realized that his vision of multinationals running the world is essentially correct. Made me kind of sad too. Since being laid in the financial services meltdown I am now working for an offshore outsourcing firm with the client being a Fortune 10 company. These days I can relate more to Tom Joad than Adam Smith...