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How India is Saving Capitalism 1174

Posted by michael
from the one-job-at-a-time dept.
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?'"
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How India is Saving Capitalism

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  • Morally? (Score:5, Insightful)

    by pbrinich (238041) * on Friday April 02, 2004 @09:51AM (#8745859)
    Since when did capitalism have anything to do with morality?
    • Re:Morally? (Score:4, Insightful)

      by JanneM (7445) on Friday April 02, 2004 @09:53AM (#8745866) Homepage
      And why, exactly, is hiring people in other countries immoral?

      • Re:Morally? (Score:3, Insightful)

        by michaelmalak (91262)
        It's immoral to lay off a head of household to hire someone outside the country just to increase profits.

        Hiring someone outside the country while not firing anyone is a different question. There the question is the morality of negatively impacting job opportunities in the short term while possibly (if we are to believe the globalists and if we believe that somehow multi-national monopolies will be reined in) improving the economy (and the job situation) in the long term.

        This critical distinction has been u

        • Re:Morally? (Score:4, Insightful)

          by kraut (2788) on Friday April 02, 2004 @10:06AM (#8745958)
          Why is the person outside of your country - probably also the head of a household - less deserving than the person in your country?

          Sorry, that's not a moral argument.
          • Re:Morally? (Score:5, Interesting)

            by Marc2k (221814) on Friday April 02, 2004 @10:29AM (#8746171) Homepage Journal
            It's not a question of who's less deserving at all. At the most basic, you can reduce the problem to two candidates in separate countries who are equally "deserving" (both in the sense of being qualified for the job, as well as the humanitarian sense, as you're more likely to mean): the only difference being [roughly] the disparity in the cost of living, which allows the company to pay fewer real dollars in salary.

            I'm not going to go so far as to say that this is immoral, but surely you can concede that morality has nothing to do with capitalism (as your question, does, in effect, relate to morality).
            • Re:Morally? (Score:5, Insightful)

              by kerrbear (163235) on Friday April 02, 2004 @01:19PM (#8747743)

              I'm not going to go so far as to say that this is immoral, but surely you can concede that morality has nothing to do with capitalism (as your question, does, in effect, relate to morality).

              I don't think Capitalism and morality are perpendicular, but instead are loosely coupled. Immoral behavior by Capitalists will hurt Captitalism (witness the Enron and Tyco scandles), and morally based Capitalim will positively effect Capitalism.

              I believe Henry Ford paid his workers a living wage because he relized that if he did not, then nobody would be able to buy his cars. If we continue to send labor overseas in the race to the bottom then we will depress our own wages, and who will then buy the products manufactured overseas? Answer: fewer and fewer, which means lower profits. Thus, immoral Capitalism hurts the goal of Capitalism.

          • Re:Morally? (Score:5, Insightful)

            by prell (584580) on Friday April 02, 2004 @11:14AM (#8746611) Homepage
            A lot of questions! Good to see some skepticism.

            First off: globalization is pretty inevitable. In the long run, it's good for everyone (and how many things can be characterized that way?). In the short run, however, there are growing pains:
            • For the people in other countries: Their lower standard of living and (sometimes) lax labor laws allow American corporations to pay very low wages and offer little benefits or health considerations. Obviously you see this in countries with, for example, sweatshop textile factories: there are many questionable human rights situations and very low wages, but still it is a step up for many of these workers!
            • For the out of work American: Americans are used to their standard of living. Our laws enforce it, in fact. How can we compete with an unapproachably slim (relatively) standard of living, and freer-reined corporations?

            I should point out again that the goal of a corporation is to make money. They will not follow "moral" guidelines unless they are enforced by law. The only thing I would ask for in this period of globalization is that corporations that leave America be held to our human rights/workers' rights standards and laws. They should also be held to fair-wage laws (based on whatever the dollar fares against their currency, I guess).

            I wouldn't accuse anyone of nepotism: these are tough times for some people, and nothing is black-and-white. The struggle seems to bring the worst out of some people though, on all sides.
        • Re:Morally? (Score:5, Insightful)

          by JanneM (7445) on Friday April 02, 2004 @10:13AM (#8746013) Homepage
          Again, why is "outside of the country" the critical variable?

          Why not "outside of your town", or "outside of your circle of aqcuaintances"? Or, indeed, given the terms of your post, "outside of your extended family"? You are aware that you are, by extension, advocating nepotism?

        • Re:Morally? (Score:5, Insightful)

          by TopShelf (92521) on Friday April 02, 2004 @10:16AM (#8746034) Homepage Journal
          "It's immoral to lay off a head of household to hire someone outside the country just to increase profits."

          But what if you hire two heads of households outside the country to replace the one domestic worker just laid off, and still cut costs?

          And who, exactly, is being immoral under your judgement? The executive who makes the decision, or the buying public, who continuously sends strong signals to companies that lowering prices is the most important thing they can do to increase sales? People vote with their buying power every day, and you've seen the results in the rise of discount chains like Wal-Mart and Best Buy.

          The bottom line here is that white-collar types have gotten fat and happy over the last several decades, and are now shocked to find that they are facing global competition much like agricultural and manufacturing workers have for decades.
          • Re:Morally? (Score:5, Insightful)

            by EvilTwinSkippy (112490) <yoda@e t o y o c .com> on Friday April 02, 2004 @10:43AM (#8746293) Homepage Journal
            Since when is 70 hours/week, paying off school loans, and sucking it up every year as your health insurance rates skyrocket "fat and happy."

            Look at American productivity numbers. The amount of work we do per capita exceed that of the Japanese, who we used to stereotype for working too hard. These companies were built on the work and sweat of the employees, and rather than share in the profit we are being sent off to the glue factory.

            I don't know whether you are trolling, but you really struck a nerve.

          • Re:Morally? (Score:4, Interesting)

            by demachina (71715) on Friday April 02, 2004 @11:14AM (#8746617)
            "The bottom line here is that white-collar types have gotten fat and happy over the last several decades, and are now shocked to find that they are facing global competition much like agricultural and manufacturing workers have for decades."

            First off India isn't "saving capitalism". Capitalism is using India to satiate its voracious appetite for cheap labor. In the complete absence of any checks on it there is zero chance of Capitalism failing. It will take care of itself, it always does. It will destroy a lot of people en route, like it always does. The people being destroyed are just changing. Capitalism is about picking winners and losers.

            As for facing global competition, there isn't really any competition to it. You can live like a prince in China or India for ten dollars an hour. In the U.S. you are living in poverty at that wage.

            What you're seeing here is all of the barriers to globalization have been removed. As is the way of capitalism, it rushes to the cheapest labor that can do the job. With globalization a labor pool of a couple billion new workers has come on line in China and India. There were also huge imbalances in the cost of labor between developed and developing countries. In China in particular there is no minimum wage, no pollution controls, no workplace safety regulation, health care costs aren't spiraling out of control like they are in the U.S. and there are no out of control taxes, especially payroll taxes, draining a workers income. There is a near inevitably that globalization is going to devastate workers in developed countries whether it be the U.S. or Western Europe. At the same time its going to continue to make multinational corporations and their share holders richer. If the government in the U.S. cared about working people it would have left enough barriers in place so they wouldn't be broadsided by the imbalances in global labor markets. Instead corporations are actually being given tax incentives to move jobs off shore. The fact is both Republicans and Democrats are so in the pockets of multinational corporations now abandoning U.S. workers is inevitable until working people get a clue, realize they are in the majority in the U.S. and start voting out any politician who is screwing them in favor of multinationals.

            Indians should note that if Indian labor becomes wildly successful wages and cost of living will start to inflate. In the new world order, as soon as it does the jobs will just move to China or Vietnam and Indians will be carping about off shoring. The one thing in their favor is it will be a near impossibility to achieve full employment for the billions of workers in China and India. If you were to do it you would proably decimate increasingly scarce world resources like oil.

            What you're seeing here is a godsend to multinational corporations and a death knell to workers. Workers in India and China should rejoice now for their rising prosperity but they should appreciate that they are just as expendable as workers in the U.S., its just a matter of time and inflation. With globalization we have reached a market that is entirely in the favor of employers and entirely against employees.

            Its no accident the Bush administration is all for outsourcing because its entirely pro business and anti labor. You see the writing on the wall when you read a bio of Elaine Chow, Bush's labor secretary. Her father and her family make their fortune in container ships, shipping goods from China to the U.S.


            Our labor secretary is decidedly anti labor as evidenced by her departments effort to strip U.S. workers of overtime pay last year.
        • Re:Morally? (Score:3, Insightful)

          by dnoyeb (547705)
          The immorality is not in hiring the foreign worker, its in paying that worker an immoral wage.

          AlI still don't believe they *had* to hire Indian workers or go broke. If you are at the point where the only savings left is cutting engineers, then you have the most efficient company in the history of the world. And I have a hard time believing that management which could design such efficient processes can only think of cutting engineers as a cost save.

          Typically what happens is the quality managers design t
          • Re:Morally? (Score:5, Informative)

            by l-ascorbic (200822) on Friday April 02, 2004 @10:42AM (#8746289)
            The wages paid to Indian workers are actually considered very good. The difference is in puchasing power parity [] dollars, and unadjusted rates. As more jobs are created in India, there is more competition for skilled workers and their wages increase. As the gap between US and Indian wages decreases, they will need to find other ways to compete than price. This is much like Japan did in the past 50 years: going from competition on price of good such as electronics and cars, to competing on innovation and quality. A good outcome for all concerned.
        • Re:Morally? (Score:5, Insightful)

          by sowellfan (583448) <sowellfan AT gmail DOT com> on Friday April 02, 2004 @10:51AM (#8746390)
          The same argument was made against allowing blacks into the unions not too long ago. White factory workers saw blacks as a threat to their livelihoods, since they (blacks) were generally willing to work for less.

          In fact, the same general situation happened in South Africa, from what I understand, even under apartheid. Even with that society being generally racist, there was still a big part of the white business community that worked hard to flout laws against hiring blacks. Whether they thought less of the black man or not, it just made good economic sense to hire him if he was cheaper than a white worker. So the government had to actually work to enforce apartheid, even when the business owners they were influencing were racists in their own right.

          It's immoral to tell someone that they aren't allowed to compete with me, just because I was lucky enough to be born a white man in America, and they weren't. Another thought that comes to mind is that, as Americans, we have an awesome opportunity. We're given an opportunity for a free decent education (obviously depending upon the location, but still better than most folks in the world), we're given economic freedom, along with all the other freedoms to develop ourselves that come with being Americans. If we, as Americans, can't compete with people from second and third world countries, there is a problem with us, not with them.
      • Re:Morally? (Score:5, Funny)

        by meringuoid (568297) on Friday April 02, 2004 @10:22AM (#8746095)
        And why, exactly, is hiring people in other countries immoral?

        It's immoral because the job of businesses is not to maximise shareholder value by increasing their cost-effectiveness - their job is to provide a welfare service to Slashdot readers who were laid off after the dot-com crash. Duh.

    • Re:Morally? (Score:5, Insightful)

      by HMA2000 (728266) on Friday April 02, 2004 @10:02AM (#8745922)
      The moral thing to do is for management is to uphold their DUTY to the shareholders, if it is not a corporation then management must uphold their duty to the stakeholders.

      Either way the idea that outsourcing is somehow immoral when it fulfills the duties that management is committed to seems absurd.
      • Ridiculous (Score:3, Insightful)

        by Anonymous Coward
        " 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...".


        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 simp
      • Re:Morally? (Score:5, Insightful)

        by Mateito (746185) on Friday April 02, 2004 @10:22AM (#8746103) Homepage
        > The moral thing to do is for management is to
        > uphold their DUTY to the shareholders.

        Thats not moral, thats a legal requirement.

        Its the same requirement that requires Exxon to minimalize the public relations disaster caused by a rupturing oil tanker, rather than the moral one which says "clean it up".

        Its the same requirement that requires Enron's auditors to change their company name and logo, rather than admitting they overlooked one of the biggest corporate collapses in history.

        Its the same one that causes Ford to through the blame for their un-balaced top-heavy vehicles onto a tyre manufacturer.

        There is nothing moral about protecting shareholder interests.. and that it needs to be done every three months is one of the reasons that corporations are so screwed.

    • Re:Morally? (Score:4, Insightful)

      by cshark (673578) on Friday April 02, 2004 @10:04AM (#8745935) Homepage
      Since when did anything have anything to do with morality?

      You're absolutely right.
      Let's you and me go to India and open up a sweatshop.
    • Re:Morally? (Score:3, Interesting)

      by Urkki (668283)
      Well, of course it does! Everything has to do with morality.

      From purely capitalistic point of view, the moral thing to do is to maximize profits in short term, while ensuring the survival and profitability of the company in the long term. These are often the same thing (long term survival probably being more important if there's a conflict between these), as not trying to maximize short-term profits can easily lead to going bankrupt unless long-term prospects are good enough to attract risk capital anywa
    • Re:Morally? (Score:5, Insightful)

      by EvilTwinSkippy (112490) <yoda@e t o y o c .com> on Friday April 02, 2004 @10:17AM (#8746056) Homepage Journal
      What we are talking about has absolutely nothing to do with capitalism. Adam Smith was a revolutionary in his time for wanting Kings and state out of the marketplace, and let products and suppliers succeed or fail on their own merits.

      If Adam Smith were alive today he would be up in arms about the amount with which large corporations thwart the will of the market. Between volume discounts, incestuous relation between big business and regulators, and corporate empire building.

      We don't have capitalism.

  • Great... (Score:3, Interesting)

    by Shirov (137794) on Friday April 02, 2004 @09:53AM (#8745872) Homepage
    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...

    • Re:Great... (Score:5, Insightful)

      by sebmol (217013) <sebmol@[ ] ['seb' in gap]> on Friday April 02, 2004 @09:56AM (#8745887) Homepage
      Then maybe instead of whining and complaining about it, Americans need to be proactive about making employment more competitive. There's no good reason why a company should keep jobs in the US if they can get the same quality of work somewhere else for half the price or less.
    • Re:Great... (Score:5, Interesting)

      by Maestro4k (707634) on Friday April 02, 2004 @10:03AM (#8745929) Journal
      • 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...
      Never if most of the middle class keep believing politicans who claim tax cuts/etc. are aimed at helping them out. I am shocked at how many educated smart people that believe these claims without even bothering to investigate to make sure they're valid. I don't hold much hope of the majority of middle class voters ever getting a clue on this, so I'm afraid the answer to your question may be "never".
    • Re:Great... (Score:5, Insightful)

      by skaffen42 (579313) on Friday April 02, 2004 @10:04AM (#8745941)
      I was planning on making some "In Soviet Russia" joke, but I guess you won't understand why it was funny.

      PS. Just the fact that you are posting on /. probably means that you fall in that top 2% (when you consider the planet as a whole). Remember, the majority in this case is the billions of people in the third world who also want a piece of the action.

    • by Mark_in_Brazil (537925) on Friday April 02, 2004 @10:28AM (#8746153)
      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.

      • by mdfst13 (664665) on Friday April 02, 2004 @11:50AM (#8746951)
        No, capitalism is working just fine. In the 90s, there was a shortage of trained computer programmers in the US. As a result, countries like India and China started training programmers (some of whom went to US colleges; my CS graduate program had more foreigners than US members). In the 90s, this greatly increased the number of programming jobs in China and India but did not affect the US (at least not much, programmers were experiencing full employment in the US; otoh, it did provide an excuse for work visas and enabled some Indians/Chinese to move to the US to work).

        The problem is that the programming boom ended. As a result, companies cut back. This (and the continuing educational push) created a large number of well-educated but unemployed Indians and Chinese. It is so bad over there that people with doctorates are manning help desks (and unable to actually help people, because outsourced help desks are all about minimizing call length; not to mention that a doctorate in programming is of little use in helping someone figure out that Word Perfect won't work during a power outage). As a result, a company can save money by switching to Indian/Chinese programmers and is under cost pressure to do so.

        This is not a failure of capitalism; it's just a characteristic of business cycles. The big question is if the demand for programmers will return to its previous level or if it will be permanently lower. If the first, we techies should just ride it out. If the latter, many techies should switch careers.
  • One must remember (Score:4, Insightful)

    by kemapa (733992) on Friday April 02, 2004 @09:54AM (#8745873) Journal
    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.
    • Re:One must remember (Score:3, Interesting)

      by Maestro4k (707634)
      • 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'll play the devil's advocate here (personally I despise the outsourcing movement). Some companies we think don't need to outsource are forced to because competitors have. Those competitors may have outsourced intia

    • My question is, whatever happened to hiring starving college students for a startup? I've had a few gigs where I was paid in hosting space, or spare parts. And that experience allowed me to take on far more demanding professional work.

      When the bottom rung into IT is halfway around the world, we are going towake up one day and ask why there are no skilled people here.

      If the goal is good, homegrown talent that you train yourself is the only answer. If you want cheap you generally get what you pay for. If

    • by HungWeiLo (250320) on Friday April 02, 2004 @10:24AM (#8746118)
      It all goes back to the whole "Nobody ever got fired for buying IBM before." It's a sheepherd mentality amongst the upper management. The writing's all over the wall in regards to cost-savings benefits offered by outsourcing. It's in all the industry rags. It's all that's being talked about at the business cons.

      At the day of judgment, I guess none of them wants to be singled out because they "lost" the company millions by not doing what the others have done. It's fair to say that not all of them have investigated the balance sheets carefully enough to understand all the benefits and/or ramifications of outsourcing, but rather have done this simply because others have.
  • Right thing? (Score:4, Insightful)

    by rot26 (240034) * on Friday April 02, 2004 @09:54AM (#8745874) Homepage Journal
    '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.
    • Re:Right thing? (Score:5, Insightful)

      by Anonymous Coward on Friday April 02, 2004 @09:56AM (#8745889)
      So, the right thing to do is to lay off everyone (go out of business), rather than laying off some fraction of everyone? How odd....
    • Re:Right thing? (Score:5, Insightful)

      by gcaseye6677 (694805) on Friday April 02, 2004 @10:20AM (#8746081)
      This is exactly what French companies must do, and as a result, there is not much economic growth in France. When it costs so much to hire people and its so hard to fire them, not surprisingly companys don't want to hire unless absolutely necessary, which translates into double digit unemployment.
  • Oh please. (Score:5, Interesting)

    by Gannoc (210256) on Friday April 02, 2004 @09:54AM (#8745875)

    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.

    • Re:Oh please. (Score:5, Insightful)

      by kmonsen (606584) on Friday April 02, 2004 @10:02AM (#8745924) Homepage
      The important thing here is that the race includes labour protection laws, minimum wages and even basic human rights. As soon as you start the "This is better than nothing" justification you should know you are wrong. I am not against outsourcing (hey, I don't live in the US), but I think we should restrict our trading with countries that follow basic human rights. If not we will all loose the few rights we still have.
  • Friedman (Score:5, Informative)

    by TrentL (761772) on Friday April 02, 2004 @09:54AM (#8745876) Homepage
    The NY Times Tom Friedman has written many articles [] arguing a similar point.
  • And uh... (Score:4, Insightful)

    by Jason Hood (721277) on Friday April 02, 2004 @09:54AM (#8745878)
    Nike wouldnt exist if it wasnt for childeren in Pakistan.

  • sure. (Score:3, Interesting)

    by YanceyAI (192279) * <> on Friday April 02, 2004 @09:56AM (#8745886)
    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?

    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.

    • Re:sure. (Score:3, Insightful)

      by sebmol (217013)
      How is refusing to go off shore in the best interest of the company and its shareholders if they can cut costs and increase profits?
      • Re:sure. (Score:4, Insightful)

        by Slick_Snake (693760) on Friday April 02, 2004 @10:14AM (#8746017) Journal
        If everyone is out sourcing their work off shore then there will less money going into the pockets of potential customers (laid off employees) and thus fewer products will be bought. The key to a successful economy is the circulation of currency within the economy not out of the economy.

        You can't just look at this in a company by company basis. Capitalism works of the principle of supply and demand. There will only be a demand for products when there is money to buy them. There will only be money to buy them if people have jobs.

    • Re:sure. (Score:5, Insightful)

      by jabberjaw (683624) on Friday April 02, 2004 @10:02AM (#8745923)
      If companies refused to go off shore, then everyone would be able to survive and we wouldn't lose any jobs.
      Or the company cannot keep costs down and thus fails to meet shareholder's expectations and flounders, bringing everyone down with it.
  • The real question (Score:5, Insightful)

    by pbrinich (238041) * on Friday April 02, 2004 @09:57AM (#8745899)
    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?
    • by fuzzy12345 (745891) on Friday April 02, 2004 @10:01AM (#8745919)
      Spend less time on slashdot?
    • by sybert (192766) on Friday April 02, 2004 @10:50AM (#8746376) Journal
      The real answer is that we are more competitive. []
      A new report from the Commerce Department shows that the U.S. runs a large trade surplus in information technology (IT) services. This is precisely the area where most of the job loss from outsourcing is supposed to be taking place. In 2002, the U.S. exported $3 billion worth of computer and data processing services and $2.4 billion in database and other information services, while importing just $1 billion of the former and $200 million of the latter.
      We are insourcing (service exports) far more than we are outsourcing (service imports) in IT. And all the money that gets saved from outsourcing gets spent and creates jobs elsewhere.

      Open source software is nothing but massively outsourced labor. And remember from the open source debate that most of the money is made from using software, not writing software. Both outsourcing and open source makes software cheaper so that more people can make more money using software. This adds significantly to both the US and the world economy.

  • by ghostlibrary (450718) on Friday April 02, 2004 @09:58AM (#8745900) Homepage Journal
    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.
    • Actually, a lot of the companies that are outsourcing get huge tax breaks from the government, something John Kerry wants to eliminate. So they are outsourcing, AND we aren't getting their taxes!
  • The Bottom Line (Score:4, Interesting)

    by NoseSocks (662467) on Friday April 02, 2004 @10:01AM (#8745916)
    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?
    • Re:The Bottom Line (Score:3, Insightful)

      by Draknor (745036)
      Yeah, you've pretty much hit the issue - Americans want cheap shit.

      It's our consumeristic, throw-away society. When it becomes cheaper to throw away a broken piece of equipment and buy new (TV / VCR / computer / microwave / etc) than to repair it, we've got a self-perpetuating problem:

      1. People buy cheap stuff
      2. Companies that have the lowest prices get more business
      3. These companies cut costs even more by integrating everything and greatly reducing the possibility of repair
      4. People's cheap stuff break
  • by cygnusx (193092) on Friday April 02, 2004 @10:03AM (#8745925) Homepage
    I live in Chennai. Imagine: a dusty hellhole blasted by an unforgiving tropical sun (daytime can be as bad as 44C/90% humidity, from the sea), parched by chronic water shortages because there's not enough fresh/river water to support the population, a place where no sane man would choose to be, but which is "outsourcing's ground zero" (Salon's words) because it has the one thing prized throughout the Imperium: CHEAP PROGRAMMERS.

    There's such a severe shortage of water here that while the wealthy buy theirs commercially and have it delivered to their homes in trucks by the tankful, their servants -- the legions of drivers and cooks and maids and guards -- wait in line for more than an hour each day to receive their own subsidized rations.

    Walking the ragged sidewalks here means dodging not only the other pedestrians and stray dogs, but one-man-band businesses that have annexed scraps of pavement: a tailor sits behind an ancient sewing machine in the middle of the pavement, open for business.

    And yet, on the same streets where child beggars wade into traffic, putting their cupped filthy hands to their mouths to plead for food, billboards advertising "Business Process Outsourcing" broadcast an entirely different set of possibilities.

    (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.

  • by erroneus (253617) on Friday April 02, 2004 @10:03AM (#8745933) Homepage
    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.
  • by nycsubway (79012) on Friday April 02, 2004 @10:06AM (#8745950) Homepage
    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.

  • by copponex (13876) on Friday April 02, 2004 @10:12AM (#8746001) Homepage
    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?
    • by Fulcrum of Evil (560260) on Friday April 02, 2004 @12:16PM (#8747204)

      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.

      Goody, farmers can't move on to the next thing. This begs the question: why don't techies do that? Answer: what's the next thing? Why should I spend money I don't have to retrain for something that's going to India in 3-5 years?

      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.

      Are you implying that I should give up my low-crime apartment and clean water because there are starving children in China? I bitch about American corps selling me out and you call me insensitive to the plight of poor 3rd world countries (with an assumed racial bias). Fact is, if I lose my job, I may well be starving - welfare is going away because people like Bill Maher are opposed to any social safety net.

      So, you're a programmer. Someone else can do your job for 1/4 of the price with the same quality.

      Actually, nobody seems to care about the quality of my work, only the price on the balance sheet.

  • by Walkiry (698192) on Friday April 02, 2004 @10:15AM (#8746024) Homepage
    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.
  • Skewed markets (Score:4, Insightful)

    by mikey_boy (125590) on Friday April 02, 2004 @10:15AM (#8746026)
    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.
  • by AshleyB (18162) on Friday April 02, 2004 @10:16AM (#8746033)
    "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."
  • by kryzx (178628) * on Friday April 02, 2004 @10:18AM (#8746061) Homepage Journal 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.

  • by Anonymous Coward on Friday April 02, 2004 @10:20AM (#8746079)
    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 (Score:4, Interesting)

    by haggar (72771) on Friday April 02, 2004 @10:24AM (#8746119) Homepage Journal
    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.
  • by morelife (213920) <f00fbug@postREMOVETHI S m> on Friday April 02, 2004 @10:28AM (#8746156)
    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.

  • Better link (Score:5, Informative)

    by arvindn (542080) on Friday April 02, 2004 @10:32AM (#8746188) Homepage Journal
    Why does the link for Chennai go to some stupid commercial site (which is already slashdotted)? A much better place learn about the city is the wikipedia entry for Chennai []

    - A Chennai resident

  • by stecoop (759508) on Friday April 02, 2004 @10:37AM (#8746242) Journal
    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...
  • by sybil5000 (467733) on Friday April 02, 2004 @10:49AM (#8746363)
    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.

  • 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.
  • by sybert (192766) on Friday April 02, 2004 @11:13AM (#8746600) Journal
    I have to view an anti-Bush ad. to read the article defending outsourcing.
    "Outsourcing is a sensitive topic in the U.S. for political reasons," Behlendorf says. "But the open-source community has been doing outsourcing since the beginning." Programs like Apache and Linux and many others, he argues, were developed by thousands of volunteers from around the globe -- an example of massively outsourced labor. In a sense, the move by Western corporations to outsource programming operations to developing nations isn't just about cutting costs, it's about adopting a new software development model.
    The same slashdot crowd that worships open source demonizes outsourcing. Outsourcing only allows commercial software many of the same cost benefits of open source software. And remember from all the open source debates that most of the money is made from using software, not writing software. Both outsourcing and open source makes software cheaper and more available so that more people can make more money using software.

    If open source is good for programmers, than outsourcing is also good for programmers.

  • Unbalance (Score:4, Insightful)

    by silverhalide (584408) on Friday April 02, 2004 @11:29AM (#8746749)
    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).
  • by Anonymous Coward on Friday April 02, 2004 @11:35AM (#8746816)
    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.
  • by SubtleNuance (184325) on Friday April 02, 2004 @12:07PM (#8747119) Journal
    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.
  • How Ironic (Score:5, Insightful)

    by gabbarsingh (207183) on Friday April 02, 2004 @12:12PM (#8747163) Journal
    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.
  • by Wintermancer (134128) on Friday April 02, 2004 @12:20PM (#8747239)
    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.
  • by GPLDAN (732269) on Friday April 02, 2004 @12:27PM (#8747295)
    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.
  • by bennomatic (691188) on Friday April 02, 2004 @01:12PM (#8747678) Homepage
    I know someone who works at CollabNet, and they require engineers to be available at all times, to train their Indian counterparts to take over their jobs and work six or more days a week. They're allowed to telecommute if they are over six days of 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.

  • by ViVeLaMe (305695) on Friday April 02, 2004 @01:14PM (#8747692)
    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.
  • by univgeek (442857) on Friday April 02, 2004 @02:38PM (#8748621)
    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..

Center meeting at 4pm in 2C-543.