Outsourcing? You ain't seen nothing yet. (A sort of rant)

[Taxloss]

India became independent just at the time when the Berlin airlift was giving the world its first taste of the Cold War and as China went Red under Mao. The West in general, and the USA in particular, saw that "losing" India to the Communists as well would be a crushing blow to the global balance of power. To shore up India, it was necessary to shore up Indian democracy, and America judged that the best way to shore up Indian democracy would be to give it a solid legal system. Legal experts flooded into the new, giant democracy to set up law schools along American lines.

A few years ago, Malaysia - in a typically ambitious move - said that it planned to leapfrog the West's 200-year industrial history and aim straight for a Western-style "knowledge economy", based around creative and service industries. It and Singapore have been building whole towns and cities specifically as creative hothouses.

These are the foundations of the third wave of outsourcing. First, heavy industry went. Then, skilled manufacturing went. Unskilled services are now going - call many UK companies and you'll be conducted straight to a centre in Delhi.

Next, it's going to crash right into the boardrooms, and sweep over the "knowledge economies" that our neo-liberal masters have told us we must build. The developing countries aren't stupid - they don't want to be the dumping ground for our dirty industries forever.

Legal services will probably be the first to go. Why operate law firms with expensive paralegal and support staff when those jobs can be freely beamed down the fibre-optics to India? Advertising is also high on the target list - India already has the world's largest film industry, and is making overt moves to become the world's Madison Avenue. Six-figure - maybe even seven-figure - salaries are about to go. Industrial design and product design are already seeping away. European furniture houses are fighting a titanic, but losing, battle against near-identical Chinese imports.

This is the upshot of globalisation. As an engine of global redistribution of wealth, it could be welcomed, if only it didn't hurt so many people and increase dangerous inequalities so rapidly. As in most neo-liberal trends, the big winners are the top 1%. The best we can expect is a protectionist reaction and the global economic slowdown that would bring. The worst is a century of booms and busts on an unprecendented scale, with the connected increase in malign -isms, particularly fascism.

What weneed urgently is a global compact on fair trade - a balanced system that moves away from the monetarism of the IMF and World Bank and creates a genuine consensus on trade and wealth between the "rich countries" and the "poor countries" - but really between the rich people globally and the poor people globally. Not the sort of ragbag compromises currently brokered in international trade talks - a real global charter.

Will that happen? Not until they start firing the suits. Then we'll see.

[HockeyMom]

1. Virtual Teachers from India

AOL did a pience on that month's ago. One Public School System in the MidWest was talking about implementing it on a part time basis. Kids could stay home and take classes online. Not only put teachers out of work, but probably a number of students Moms, too.

[Taxloss]

2. Why not?

The implications are staggering.

[eppur_se_muova]

5. This is one reason I have never wanted to jump on the online-learning

bandwagon. Many jobs for educators now require "distance learning" duties as part of the job. Since the vast majority of the course material repeats from year to year, there's bound to be a temptation to record the lectures once and just replay them over and over, with maybe 10% effort devoted to live, interactive instruction. Anything to decrease the number of skilled, educated people who can make a living teaching others!

Sadly, some of the people doing the most to encourage this are the admins of universities and colleges. They're actually pushing to have their "community of scholars" replaced by a roomful of servers. The only advantage to it is the bottom line, and to some people that trumps everything.

[SmokingJacket]

8. Sheesh, why even bother with that?

If you're happy with a virtual teacher, just plug into the internet.

The point of having a real, live teacher in the room is that it's a real live human you can have a real relationship with.

If you just want a person spouting information, go get a book on tape.

[peacetalksforall]

3. It's the stockholders who are the key. It's all in their hands. Fire a

CEO or CFO and they just pop right back up again at another company.

Stockholders need to decide if they are going to invest in lecherous, predator companies and demand the profits from the outsourcing - or - if they want and demand a culture that guarantees that their children and grandchildren get to find challenging work, succeed, and make their own way.

It's all in the hands of stockholders.

[SPKrazy]

12. Isn't Most Stock Held Now In Mutual Funds Through 401 K's

no wonder * wants to give Social Security money to the markets, then Mutual funds could run the country completely out of business.

Maybe we are supposed to just sit back and let our 401 K's grow (except when the market is tanking like it has over the last 3 weeks) in order to compensate for the fact that WE WON'T HAVE A JOB! due to outsourcing.

[salvorhardin]

4. Alas, I think it's inevitable

And that we're in a period of change where the old ways -- including fair trade -- won't work any more and we need to start trying to understand how we can provide for everyone in a world where individual productivity is magnitudes greater than it ever was in the past, and today. When you add automation into the mix, especially for manufacturing jobs but soon for a lot more, it becomes easy to see that the world envisioned by the 1930s futurists where there simply isn't enough work to keep everybody employed was not a pipe dream, just delayed by a few decades. The problem is, it won't be the utopia where everyone works at what they desire for a few hours a day for an equivalent wage as a full time job. Taxloss is right about the impact. Those six and seven figure salaries will become a thing of the past, except for a lucky few. So what do we do?

I don't know. There has to be some form of economic reorganization, but Taxloss global fair trade compact is just a stopgap I'm afraid. Still, it is needed to buy us some more time until we can figure out how to deal with the embarassment of riches, and the tragedy, brought about by technology. Untill then firing suits is probably not a bad thing either.

[eridani]

17. Lavorare meno! Lavorare tutti!

Work less, and everybody works.

[Taxloss]

18. In the long run, I think we'll see a return to craft.

The rise of a "quality economy" where the inherent value and worth of products is restored, and they are not based on bargain-basement instant obsolescence. If you buy, say, a table, it will be locally made and well made. It will last you for 50 years, and when it gets chipped or needs revarnishing, you can take it back to the maker - an individual, not a company.

There will still be mass production, but it will not be governed by the dictates of lowest possible price. Competition will still exist, but on a local level, based on quality, not price. international trade will exist but will either be very slow or very expensive thanks to energy restraints. City centres will repopulate and blossom with a million tiny kitchen gardens. Street parking will disapear in favour of street markets. In the ultimate irony, as people flee the suburbs to the centre, the suburbs will switch to micro-industrial usage. Joineries and workshops where carports once were. The vast tin sheds of hypermarkets become proper markets - cattle, fruit and veg, barn space, until the buildings reach the end of their 20-year life and better, more permanent structures are built more convenient for downtown. Freight and passenger rail will thrive as the only affordable mode of intercity travel; airships may once again become economic. Something beautiful blossoms from the ruins of the fossil economy.

That's my optimistic vision.

[salvorhardin]

19. It's a lovely vision

And a world I'd love to live in. But as I said previously, I'm not sure we can get there from here and I think it might be a little too rational in that it requires people to act in their own best interests -- something people have shown they will repeatedly not do time and again. Actually that's my primary criticism of all economics, this notion of the rational actor.

But... I don't see anything incompatible between your vision and technological progress and automation like I talked about in my previous post might help us get there. Miniaturization, nano-scale technologies, biotech, cybernetics -- they can help or hinder us.

[salvorhardin]

20. Another thought...

Are you familiar with the social credit movement? If not, google it sometime. Not that I believe it's workable, but it's certainly an interesting idea. I don't think there's anything inherently preordained about our current economic system and I think it is failing us. Again, not that I think social credit is tenable, but my point being that among other things we, as a people, need to start thinking about our economy and realize that it ultimately derives from the people as much as government and if we don't like it we should be able to change it.

[Taxloss]

21. I think this sort of system will be just one of an ecology of different

systems - social credits, co-ops, credit unions, parecon systems, non fiat trade currencies, all sorts of things.

The basic models and prototypes for a lot of these systems already exist. They'll appear of their own accord when the supermarket shelves begin to empty and dollars are worth hugely different amounts in different cities.

Have you read EF Schumacher?

Also, responding to your other reply, just to keep things on one subthread:

A key factor is transport. Once the ability to transport goos across huge spaces gets steadily more expensive, these changes may become unstoppable.

[salvorhardin]

23. I'm familiar with Schumacher

and his ideas on sustainability, but I haven't read very much (actually nothing of his own writing).

You have a good point that there doesn't necessarily have to be one single economic system, in fact I would argue that there can be vastly different systems in play at once. An example currently in play, but not well understood at the moment is the attention economy.

Re: transport. I don't see transport as necessarily having to become expensive. I take a contrarian view from much of the left regarding energy. There's a near infinite supply of energy, the problem only lies in harnessing it (and not destroying the Earth's environment in the process). That might seem very scifi (and idiotically right wing) of me, but it is what I believe.

Like I said in my PM earlier, I do think we have a choice between a Star Trek style utopia and a Blade Runner style dystopia. And while it would be silly and naive to think we can achieve a utopia I do think we can choose which type of future we want to work toward.

[YankeyMCC]

6. It's going to be a difficult ride

I think you're dead on and unfortunately even if the will and power gets applied in exactly the right direction that you are pointing to the powers that be will not go down without a fight (or at least 'compensation' that will make the transition easy for them but more difficult and painful for the rest)...we and our children will certainly live in "Interesting Times" so to speak.

[nick303]

7. I think the worst we could expect is a protectionist reaction

In the long run that would hurt more than it would help.

The best we could hope for would be a collection of superpowers, rather than just one.

[SmokingJacket]

9. And it would be doomed to fail, anyway.

There are millions of desperate people out there willing to work for cheap. It will be a long, long time before corporations run out of desperate workers to exploit.

[Deja Q]

13. Not in India or China.

Each of their countries has 1.5 billion.

America has 300 million.

Difference is, Americans are loyal to America.

How do Indians and Chinese feel about America? One's an enemy we're concerned over, oddly... the other didn't give a shit either way until arrived in ~2000. Of course, while on the face of it they are appreciative of our government... just how long before that starts to change?

More important, if you're underpaying know they are being underpaid, they are far more likely to do a sloppy or less sincere job. Or, worse, they put their country over their pay and introduce little elements of instability; I heard the State department got paranoid over Lenovo recently... Indeed, I'm still trying to fathom what logmon.exe is doing on those computers. It's not identified with the keylogger tool most spyware programs would notice, yet its presence doesn't seem benign all the same.

[sadiesworld]

24. A protectionist reaction is one of the few things that WILL help...

of course, people will need to look away from all the diversionary crap (including scare tactics)thrown at them long enough to unite.

[Random_Australian]

10. K&R

[SPKrazy]

11. Radiologists In India Already Read X-Rays, and Other Imaging Studies

from India, by computer

I've read where some legal services have been outsourced. (research mainly I think)

Nothing is impossible to outsource with the technology that is available.

When Medicare will pay for video conference psychiatric visits, what's stopping a psychiatrist from being in India or elsewhere for this? (I mean if they are in Dallas seeing patients in rural Oklahoma, then how would India or elsewhere be much different?)

[European Socialist]

14. It is surprising that there is still traditional school--You would think

by now kids would do most of the learning by computer at home and go into school only once a week for socialization.

[Virginian]

15. Remember, in India, College is free.

Think of that the next time you have to pay your student loan or your child's tuition. That doesn't seem very fair at all, does it.

[muriel_volestrangler]

22. I don't think that's true, as a blanket statement

For instance:

College fees unlikely to rise

MUMBAI: Plans to hike the degree college fees-from 25 per cent to 100 per cent-may just not take off this year.

For, the Mumbai University (MU) seems to be in no mood to ruffle students in the year of its sesqui-centennial celebrations.

It was early last month that the four-member Naresh Chandra committee submitted to the MU its recommendations for raising 'other fees'-sports fee, cultural fee, library fee, magazine fee etc.

However, the panel was not allowed to raise the tuition fee, as this has been disallowed by the government.

http://timesofindia.indiatimes.com/articleshow/1611227.cms

Perhaps some universities are free; and I don't know what typical fees are; but it's not just 'free'.

[Matariki]

16. some day america won't be the richest country on earth

personally, i really hope for a world economy - even wages, a global minimum wage. how will we get there? it doesn't have to be a 'race to the bottom'. maybe if we expand our concerns, globalization could be a good thing?

[arwalden]

25. Excellent analysis.

:thumbsup: