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Exploitative Outsourcing?
May 25, 2010 9:57 PM   Subscribe

Outsourcing has been a mainstay of internet marketers and lifestyle designers ever since Tim Ferriss made it popular. But at least one of its biggest proponents is now wondering: is outsourcing exploitative by taking advantage of international economic inequality?
posted by divabat (60 comments total) 16 users marked this as a favorite

 
This just now occurred to him? Really?
posted by Tashtego at 10:01 PM on May 25, 2010 [36 favorites]


is outsourcing exploitative profitable by taking advantage of international economic inequality?
posted by Horizontally a Champion at 10:02 PM on May 25, 2010 [1 favorite]


So we should "help" those who live in less wealthy countries by refusing to give them jobs? I'm sure they'll be very grateful.
posted by Chocolate Pickle at 10:06 PM on May 25, 2010 [5 favorites]


It's not the inequality of economy but the inequality of legal protection for workers that is the major issue.
posted by Zalzidrax at 10:09 PM on May 25, 2010 [19 favorites]


Well, I am glad he wrote all of that to make himself feel better. Now is he going to hire me?
posted by lampshade at 10:09 PM on May 25, 2010


that was mind numbing.

i don't like his picture either.
posted by bhnyc at 10:11 PM on May 25, 2010


I wonder if he feels as bad when he walks into the grocery store and buys his cheap 'outsourced' vegetables or cheap 'outsourced' tennis shoes. Oh wait, this is just well to do anglo self loathing, isn't it? Crap.
posted by jeffkramer at 10:14 PM on May 25, 2010 [1 favorite]


I bet he's loving the Metafilter SEO though - probably helps him make the $20,000 a month from his blog he boasts about on his front page.
posted by johnny novak at 10:15 PM on May 25, 2010 [4 favorites]


this is just well to do anglo self loathing, isn't it?

Yaro Starak? Slavic name. Philosophy in the post is somewhat Communistic. He takes some very liberal views, about limits to accumulation of wealth, spreading wealth around. He doesn't say what "enough" money is, but believes one can have too much at which point it should be spread to others, even to people other countries.
posted by stbalbach at 10:20 PM on May 25, 2010


But at least one of its biggest proponents is now wondering: is outsourcing exploitative by taking advantage of international economic inequality?

One of it's biggest proponents in the internet marketing world? Since when do these people care about exploitation? They're basically the scum of the internet. This whole article reads like SEO spam and linkbait. No offense Divabat, but I kind of wish we wouldn't give these types extra links (Links from metafilter count for a lot in terms of pagerank, apparently)

In any event, no, it's certainly not exploitative of the people you're giving the jobs too. For them it's a pretty sweet deal.

The people for whom it's a problem are those in the first world who feel like they're having jobs taken from them. Of course, there's not a 1-1 mapping. If you have three projects you want to do, but you only have the money for one if you get them done in the U.S. Then obviously there are more total jobs, and more economic activity if you do them overseas.

The problem, of course is that the rewards of that economic activity flow to the people in the country that an employer hires from, and of course the person with the capital. Middle class people from wealthy countries are cut out of the loop.

The solution to this, IMO, is high taxation on the people who send jobs over seas and that money can be used for economic stimulus, jobs, etc inside the U.S. So, if your IT job gets outsource you could find a new IT job working for a hospital/university/government/millitary. Or work on government funded research, or whatever.
posted by delmoi at 10:21 PM on May 25, 2010 [5 favorites]


That last article is really, really bad. This guy has no idea whatsoever about how economies work. I mean, he's trying to make international wage comparisons and he doesn't even seem to have a basic conception of purchasing power or cost of living. $400 is not the same everywhere in the world.
posted by mr_roboto at 10:22 PM on May 25, 2010 [1 favorite]


He is in Australia, if his location matters to you.
posted by divabat at 10:22 PM on May 25, 2010


The effect of outsourcing is to create a two tiered economy in both both countries. 'We' don't don't provide jobs, build factories, or import stuff unless you happen to be among those with actual capital. It's always amazing to me how working people in America automatically identify with American business even when they have practically no interests in common with them. The loss of jobs and apprehension of losing jobs creates a more compliant workforce here while the lack of protections for labor abroad often means slave labor in more than a figurative sense.
posted by Tashtego at 10:23 PM on May 25, 2010 [3 favorites]


He is in Australia, if his location matters to you.
In fact, his pyramid scheme, sorry 'blog' seems to relate that he's been in Brisbane lately...
posted by johnny novak at 10:27 PM on May 25, 2010


I prefer to call it arbitrage. Heh.

Of course it's exploitative by taking advantage of international economic inequality. But like arbitrage, won't it help close the gap?
posted by uncanny hengeman at 10:31 PM on May 25, 2010 [1 favorite]


I have it on good authority that most of stuff Tim Ferriss publishes is actually written by twelve year-olds in a sweatshop in Bangalore.
posted by twoleftfeet at 10:38 PM on May 25, 2010 [3 favorites]


The effect of outsourcing is to create a two tiered economy in both both countries. 'We' don't don't provide jobs, build factories, or import stuff unless you happen to be among those with actual capital. It's always amazing to me how working people in America automatically identify with American business even when they have practically no interests in common with them.
How does it create a two-tiered economy in both countries? It seems like it would only grow the middle/upper-middle class in the target country.
posted by delmoi at 10:42 PM on May 25, 2010


And it presumably increases purchasing power in the country doing the outsourcing by lowering the costs and therefore prices. It's like we're trading some of our income for some of their reduced cost of living...
posted by mr_roboto at 10:45 PM on May 25, 2010 [2 favorites]


close the gap, hah, the problem with that is that it cuts both ways. You won't maintain our living standard and simply raise theirs, unless scarcity and entropy are dead concepts.

Also while it will close the gap between the working classes in both countries, it will increase the gap between the rich and the poor in the overall sense.

Let's draw an analogy that I think is fair. I'll live in some country with bitter racial division and lack of opportunity. Members of the non-starbellied sneeches can't get jobs and live in hovels. I've discovered that they will gladly work for any wages that will help keep their children from starving. Hey! I'm helping bridge the income gap! I'm a fucking civil rights pioneer over here and because of my star bellied-ness I can market the results of their labor for a 99% profit directly into my pocket, whereas if I had hired other star bellied sneeches who were protected from me enslaving them by their societal position, I would only have made 70% off of the results of the labor.

On top of that, I can argue that my actions are forward thinking and racially unbiased, because my detractors are all also star bellied sneeches (you can tell because they have the political capital to actually have a voice), and I can say they're backward thinking racists who want to perpetuate the inequality that I exploit.

Anybody who thinks that outsourcing is not exploitive should go give their local slum lord a great big hug for the housing he is graciously providing to the less fortunate. And salute our southern forefathers for taking their slaves out of Africa for vibrant new opportunities overseas.

I heard a hilarious thing from an outsourcing supporter once. He felt that we (nationally) would specialize into a kind of management focused country, while third world countries would specialize more and more into manufacturing. This person actually thought that if you exported all the knowledge and capacity of production, there would be a reason for anybody to continue paying us to offer, I don't even know, retreats and moral support and directive emails I suppose. The "service" economy is even more delusional than that to me. You can't go on selling things made overseas to each other eternally, anyone who can count should know that's a game that can only go on so long.

IMO, your means of income should be as locally owned as possible. The rich people who run the factory or business where you work should have their children in the same schools as yours, on the same streets as yours. Their food should be prepared in the same kitchens, their medicine provided by the same doctors. I don't see how foreign investment is ever anything but exploitive either way. I've heard the argument that free trade stops wars. I sometimes wonder if protected trade doesn't just mean that in order to destroy you an enemy would be forced to fight a war.
posted by SomeOneElse at 10:58 PM on May 25, 2010 [9 favorites]


Tim Ferriss made it popular for individuals with small businesses to outsource, sure, but major companies had been doing it already for years. Ferriss just realized that you could actually afford to find someone to check your personal emails and answer your phonecalls.
posted by bardic at 10:58 PM on May 25, 2010


That last post appears to be a guest post by someone named Jonathan Beebe - not written by the owner of the blog.
posted by sanko at 11:01 PM on May 25, 2010


So we should "help" those who live in less wealthy countries by refusing to give them jobs? I'm sure they'll be very grateful.

The re are two problems, though: they're not getting the good first-world jobs, they're getting what used to be good first world jobs at third-wrodl prives. That's great if you're a shareholder (or, more likely, a CEO) who's pocketing the difference, but overall, workers (i.e. most of us) are still being paid less.

Moreover, the "cheap IT guys" who were in India are now being undercut by Vietnam and Bangladesh after only, what, a decade as the first choice. It's a race to the bottom, with global capital always happy to move on at the drop of a hat.
posted by rodgerd at 11:17 PM on May 25, 2010


This begs the question – does outsourcing help a country move away from third world status and raise the standards for everyone in that country?
I think the answer is yes it does, but it’s terribly slow.
...
The big fat reason for why this is?
Greed.
...
How Can We Speed Up The Process?
The simple solution to this problem is to not be greedy.
USA has seriously lost the plot.
posted by mondaygreens at 11:17 PM on May 25, 2010


Stupid fat fingers. "third-wrodl prives" should be "third-world prices", of course.
posted by rodgerd at 11:17 PM on May 25, 2010


Here's the weird thing. These internet marketers and social network gurus only seem to have each other as an audience. Where does the money come from?
posted by maxwelton at 11:23 PM on May 25, 2010 [9 favorites]


Strikes me as a nuanced discussion of the issues, undeserving of the sneering it's gotten here.

I've met this guy a number of times and as far as I can tell he's sincere, and he comes across in person as quite humble and definitely not as the stereotypical self-entitled blowhard that some of you assume all bloggers must be. Struck in the ass by a rainbow, for sure, but he did spend several years working out where he should stand and at what angle he should bend over. He started his first internet business way before doing so was fashionable, he's judicious with the "AND YOU CAN TOO!!!!" thing, and unlike the majority of the proliferating meta-businesses, he has actual "runs on the board".

As to his actual conclusions, I agree with him that it is morally dubious, and I agree with him that it is not so morally dubious that one should not do it, as there is no way short of suicide to not be capitalistically exploitative as a Westerner. I also agree on the subject of osmotic equalization - but I disagree with him that the process will be slow. It has started off slow. It will pick up, and it will lower the upside a lot more than it will raise the downside.

Technology is making outsourcing easier and easier. If your ruthless capitalist boss can get the same work out of an Indian for half what they pay you, he will do so. No reason except patriotic nepotism prevents him, and his default attitude is "fuck that". Even if it wasn't to start with, he has immense economic incentive to take that attitude.

Theoretically Western prosperity--our prosperity--is going to collapse. Not with an overnight bang, but with a slow whoosh like a deflating bag. It won't collapse utterly, and it will never reach an equilibrium (we don't have equilibrium in our own societies, where transactions are near-instant and universal), but it will get a lot closer.

An alternate theory is that, in the larger global economy, a Zipf's Law distribution will continue to apply, just on a larger scale; 1% of the people will end up "owning" 90% of the world's wealth rather than just 90% of, say, the USA's wealth.

Given the choice of these two, I recommend the first.
posted by aeschenkarnos at 11:24 PM on May 25, 2010 [2 favorites]


Stupid fat fingers. "third-wrodl prives" should be "third-world prices", of course
Damn, I thought you were quoting Chaucer.
posted by Abiezer at 11:26 PM on May 25, 2010 [8 favorites]


Tashtego said exactly what I thought. Is this a question that really needs asking? Or, is it one of those questions where, when someone actually has to ask it, it speaks volumes about the person asking? You're paying pennies for labor instead of dollars, you're sending jobs overseas, aiding the rapid increase of income inequality both at home and abroad, and you wonder if, just maybe, you might be exploiting the situation? The whole reason you'd outsource anything is because there's an inequality somewhere down the line, and the outsourcer is, by definition exploiting the difference.

I try to tell my students that there are no bad questions. I don't tell them that there are questions that, when asked, make you look like an ass.
posted by Ghidorah at 11:47 PM on May 25, 2010


If you're worried about exploitation, pay your outsourced workers more. Don't use it as some lame excuse not to give jobs to people who are really poor and could do with income.
posted by surenoproblem at 11:56 PM on May 25, 2010


I wonder if he feels as bad when he walks into the grocery store and buys his cheap 'outsourced' vegetables or cheap 'outsourced' tennis shoes.

At the grocery store? Then again, I have seen weirder things. I'm still trying to figure out who buys a TV at the grocery store.
posted by dirigibleman at 12:11 AM on May 26, 2010


maxwelton: "These internet marketers and social network gurus only seem to have each other as an audience. Where does the money come from?"

Mostly from wannabe-internet-marketers & social network gurus. There's still organisations out there who want to jump on this newfangled intawebs thingy, plus a sizeable number of people who dream of taking their own little blog (or etsy store, or twitter feed, or …) and turning it into the next BoingBoing / Anandtech (or NanLawson, or shitmydadsays, or …)

It's not a pyramid scheme - it's a trapezoid!
posted by Pinback at 12:12 AM on May 26, 2010 [1 favorite]


One interesting fact about Marx that I learned recently was that he was totally opposed to the idea that the problem with capitalism is greed. Other socialists of his day advanced that view, and he mocked and denounced them. As soon as you make individual greedy capitalists the enemy, you are already playing within the moral framework that justifies the free-market system, and the inevitable conclusion is that the system itself is fine, let's not play around with that! The problem is that there are a few bad apples who abuse the system, we just need to enforce a few regulations and weed them out, and everything will be great.

Over the last few decades, left-leaning types have been enamored by decentralization, because for them, the bad apples are the centralized institutions of capitalism, the big corporations. This amount of power tempts the bad people, so the thing to do is prevent them from getting so big, and decentralization seems attractive. Internet utopians love this, like Chris Andersen's article about decentralized manufacturing provided by "post-institutional social models" the web can create: "Transformative change happens when industries democratize, when they’re ripped from the sole domain of companies, governments, and other institutions and handed over to regular folks."

But when bloggers are wondering about the ethics of $2/hr labor, it makes it clear (although really, it's already pretty clear in Andersen's article) that decentralization is a false solution. Exploitation still exists in a decentralized system; if anything, it has only extended its reach and made it more efficient. It's true we no longer have any need for an oppressive centralized corporation running a centralized team of workers on a factory floor. But instead, internet utopians bring us decentralized exploitation, where the web aggregates supply and demand of labor so that it can be exploited more efficiently. And then it sticks a shiny Web 2.0 "Liberated!" sticker on it. I think it's increasingly becoming apparent that this is a sham.
posted by AlsoMike at 12:28 AM on May 26, 2010 [3 favorites]


"I'm still trying to figure out who buys a TV at the grocery store."

Wal-mart much?
posted by bardic at 12:39 AM on May 26, 2010


Are people in rich countries complaining that their jobs are moving to poor countries? But pretending that they are mainly worried about the people in the poor countries? That's what it sounds like.

If you want to help people in poor countries, eliminate all import tariffs and other purely protectionist barriers to trade with them, but make fair treatment of workers a necessary part of doing business with them. If your market is worth anything to them, they will compete to treat their workers well.
posted by pracowity at 12:43 AM on May 26, 2010 [1 favorite]


Meh. Same old same old. A bunch of wealthy honkys telling the brown people how they should live their lives. Only this time instead of being victims of their "savage superstitious culture", they're victims of "evil internationalist capitalists". Either way it's removing the power of autonomy, and reducing them to faceless victims- while adding in a dose of "fill+in-the-blank" peril. Just the way the rich folk like to think of thw poor.

Talk about income disparity, socialism and all that bullshit all you want- this is just a fight for power between the elites. God forbid we actually get opinions from India, Bangadesh or Vietnam in this debate.
posted by happyroach at 12:47 AM on May 26, 2010


The process of a capitalist globalisation is the epitome of the removal of local autonomy; and I've read plenty enough voices from the new economies (met plenty enough of the workers at the sharp end too) to know that isn't some exclusively Western view. Chucking a bit of crude race-based reductionism into the mix is unhelpful to put it charitably.
posted by Abiezer at 1:14 AM on May 26, 2010 [1 favorite]


(@happyroach - I'm Indian but by no means representative.)

@aeschenkarnos - Your comment was a lot more nuanced than the article; as someone from the other side of the equation (I've worked as an offshore employee for big and small companies) I'm compelled to engage.

The problem, as I see it, is not that outsourcing is exploitative of non-Westerners; the problem is that it is short-sighted and self-destructive for the West. Morality may be at issue here on an individual level, but that's not the crisis. What's blowing up is that individualism itself, and everything that is built on that ideology - not just the American ideal of meritocratic capitalism but freedom and justice as well.

Don't forget that this all happens first and primarily at the level of nation-states; US citizens are legally enabled and economically pressured (in free market capitalism) to hire foreign workers. It has already come to the point where American companies need to outsource manufacturing work (and increasingly, service work as well) in order to stay competitive. Name a well-known US company and I'll bet a week's salary (in dollars) that it's operating in India or China, probably both. And small businesses in the US have it hard enough already, so of course they have to follow suit; and the leftover pool of talent here is so big (in terms of population and relevant occupations like engineering) that it just makes so more sense for the bottomline. You said as much in your comment.

But from my POV: That you have to hire non-Westerners or risk financial suicide seems to me a very exploitative situation to be in, to begin with. On an individual level you're being marketed a four-hour workweek that basically needs you to pump money and employment into other countries - if that's not a short-sighted and pathetically isolated path to "success", I don't know what is. You pay your taxes to your country and that's the level at which your rights and freedoms have meaning; but your political exercises are PR circuses (your presidential candidates have taglines!), your financial system is crooked like a dog's tail, your media is propped up by advertising and your teachers are out of work. The US has gone from creating and innovating to selling and advertising, and the dollar signs that blind it (starting with campaign funding) also keep its citizens occupied, to a ridiculous extent, in unproductive, mostly counterproductive pursuits: management, entertainment, litigation, war and buying cheap food and expensive gadgets. Now your country has "progressed" to the point that your government requires you to buy health insurance - without even being accountable or functional enough to satisfactorily reform privatized insurance first. To me that is more grotesque than, say, my income being taxed 10% at the source.

And while you're being robbed by your own country and by foreign countries (most notably, your allies in the Mid East) to the full extent that your own government allows, you're still worrying about being benevolent and selfless towards foreign labor, all in a way that is (and has to be) limited to your self. You're kidding yourself if you think this is about economic equality or equilibrium - even if that might be a consequence of it. Let go of the notion that we're all sitting in sweat shops without rights or alternatives; we're self-serving and wily to the same degree you are; and a lot more realistic (and lawless) to boot.

And yes, many outsource employees are being exploited, but usually less than the alternative, which is why we choose it. Yes, we have dysfunctional laws and governments that are selling us out in their own ways, but that's what we deal with as the citizens of these particular countries, not as outsource employees. And at the end of the day, we're profiting as a nation.

Outsourcing is just one more financial time bomb that so-called free US citizens have to carry on their backs, all the way to retirement (and after social security, beyond). You're holding the short end of the stick and if it's not laughable yet that you're trying to offset this self-destruction by making donations to these 'poorer' countries, it probably will be soon enough.

It may be that this is inevitable. It recalls the line in Igby Goes Down about economic inequality and the myopia of the wealthy: "Basically, it's like reverse Darwinism. A situation in which a less evolved species is better equipped to survive than a more evolved creature. Which, if you think about it, isn't really reverse Darwinism, so much as bigger-picture Darwinism, if you will."
posted by mondaygreens at 1:56 AM on May 26, 2010 [27 favorites]


This is what globalization means. If you can get workers in China for a tenth the cost of an American, unless the American is at least ten times better, you wouldn't want to hire him or her. There's nothing immoral here, it's just simple efficiency. This process is much of why so many consumer goods have stayed so cheap while everything else keeps going up so fast.

From a big-picture perspective, it's a global rebalancing of living standards. And this means, very simply, that your kids are not going to live as well as you did, because there are a billion hungry Indians and about 750 million hungry Chinese that all want your job. You're competing with a gigantic labor market, and it's extremely unlikely that you'll be able to outwork them, so you need to outskill them. You can stay ahead of the curve, but it's going to take a hell of a lot of effort just to try to avoid losing as much as possible.

Some people will, of course, have the idea of being protectionist, of taxing or outright stopping the import of foreign goods, but that's simply not an option. We are deeply dependent on imports; our trade deficit is right around 7% of our entire GDP. If we get protectionist, that means an instant slowdown in the economy by that 7% or more, with sharply higher prices on most goods, and the ripple effects of all those businesses failing that depend on selling those imports to survive. Further, we're also deeply in debt, both on a personal and on a national level, and protectionism will make it much more difficult to retire that debt.

China and India coming online are, in essence, the most powerful deflationary forces on global labor since America first started to bring up its textile industries and farms. This had terrible economic consequences in Europe, because the cost structures here were so much lower. Likewise, China and India will really screw us up.

This process has been going on since about the mid-90s, and we've been playing games with our currency to hide the deflation in wages. It's probably not explicitly being done to serve that purpose, but the CPI has stayed resolutely down no matter what the monetary policy has been, and they've increased and increased the money supply as partial compensation. This has had the effect of holding wages more or less static, while the inflation from the new money (and new types of financial instrument that have been invented) has mostly gone into assets, like stocks and houses and Wall Street. So the people who work with money get wealthier by leaps and bounds, while you struggle just to stay in place.

The alternative, sane monetary and fiscal policies, would have felt far more dire.. we'd have spent the last fifteen or twenty years struggling and sweating and having a terrible, terrible time. Most people would be absolutely convinced that the American Dream was dead and gone. But we'd be in much, much better shape.

We'd have known about this problem, in other words, long ago, and we've have been working the entire time to improve our efficiency and truly compete with the Chinese. We would be mad as hell, furious at how hard we were having to work just to eat, but we'd be competitive. Probably not healthy yet, but competitive.

Instead, what's happening now is waking up out of a drug-induced haze, and just starting to figure out that, hey, we're in real trouble here. But we're so fucked up from the cash and debt delirium that we may no longer be healthy enough to compete successfully. Too much of the real wealth generation of the world has gone to China, while we've been trying to get rich quick by daytrading or flipping houses.

Instead of fifteen bad years of struggle and heartache, we got to float along in a nice euphoria. But we didn't avoid the pain, we only deferred it, and made it worse. And we've put ourselves into such a bad position, with enormous debt loads and a steady erosion of the ability to repay that debt, that we may simply not be able to recover.

They're trying to put us back into the euphoria again, and it's kinda-sorta working. Things may even feel fairly good again for a few years. But our collective body is rotting out from underneath us, whatever we might feel like. Starting from scratch, how can you tell? Just look at the trade deficit, the government's fiscal deficit, and the monstrous debt positions that both the private sector and the government are carrying. This is not health, this is sickness. Things feel great as long as you can keep that debt flowing, but it has to be repaid.

If we were investing the debt in things that generated wealth, that would be one thing, but we're just consuming it, frittering it away by trading the same houses back and forth and plastering the walls with HDTVs. So when it comes time to repay our creditors, mostly the Chinese and Japanese, all we have is obsolete HDTVs and houses they can't use, instead of new tools and factories to make something they actually want.

Outsourcing is just a symptom, and trying to stop it outright will do almost nothing. If we refuse to let American companies hire Chinese workers, then Chinese companies will, and they'll eat the American companies alive anyway. And if we try to stop cheap Chinese goods from hitting our shores, we'll very abruptly discover just how dependent on imports we are, and just how bad such a huge debt load can hurt.
posted by Malor at 2:42 AM on May 26, 2010 [7 favorites]


If you can get workers in China for a tenth the cost of an American, unless the American is at least ten times better, you wouldn't want to hire him or her. There's nothing immoral here, it's just simple efficiency.

And, you know, brutal supression of any attempts to organise for better pay and conditions by central government, disregard for envrionmental externalities, and currency manipulation.
posted by rodgerd at 3:32 AM on May 26, 2010 [2 favorites]


@mondaygreens - You've just articulated everything I believe about my government and country better than I ever could.

While I don't necessarily agree with everything Thomas Friedman says, I think the main point he was trying to make in The World Is Flat was correct. The value-add of walled information is dropping fast, and the waters are pouring out to the developing world and beyond. We're looking at a world of exploit/be-exploited dynamics on the one hand, and the ability to constantly reinvent and harness new resources/create new things on the other. And as the walls come down, I think that innovation will continue to move away from the West toward the developing world. It won't completely disappear, but it will decline in general as the rest of the world catches up to our levels of ingenuity and creativity. Note that I did not say living standards.

As for what that means for outsourcing, I think it means that like capital flow and, increasingly, the flow of workers, exploitation will flow to where it is most effective for profit margins. You can't deny that in the West there are relatively higher barriers to exploitation than in developing countries. And so for now, we call it outsourcing and send jobs overseas. I don't believe that will continue forever.

I know from whence I speak, because here in Beijing, my neighbors and friends are getting their homes torn down to make way for more prefab apartment buildings. I'm surrounded by a city of half-empty apartments owned by landlords with 6-7 houses to their name and vagrants who can't afford to rent so much as a bedroom. In this city, it's very, very clear who the exploiters and who the exploited are. And it's local.

But I don't know that I should sympathize more with them than I should with the people out in the provinces. Compared to them, the people in Beijing at the very least can get a meal and a job that can send their kids to school. We have subways and $10 cell phones and dirty cheap netbooks and free wifi/net bars everywhere. At least THAT much works here. There's people out there, and not an insubstantial portion, who can't eat, can't read or write, have no education, no electricity, no healthcare beyond aspirin and rubbing alcohol...yet they're the ones who comes to Beijing to tear down the houses of my neighbors for a paltry percentage of what my neighbors make. By objective measures, they're certainly the most deserving of both sympathy AND the chance to be exploited, right? Because by exploiting them, we're at least feeding them, paying for at least one of their kids to stop tending the goats and go to school long enough to learn to read the newspaper and learn basic arithmetic.

The thing is, I care about my neighbors more. I don't mean in terms of sympathy; I have sympathy in spades for the ladies who have to scrape the grout by hand from the floor of that 11-story mall that sprouted down the street from me this summer. But I don't know them. It's not personal with them the way it is when the guy who's sold me dumplings for a year now tells me he's closing up shop because he's getting kicked out, or when the wonderful people who hold the door for me and introduced their son and parents awhile back say they're having to move out because they can't pay their mortgage. These are MY people, MY neighborhood, MY community.

But as much as I see them, I see the people I work with every day even more. And I'm even more grateful to them than I am to my community, because if it weren't for their effort and their faith in me and their competence, I wouldn't have any money at all. They aren't just my means, they're my support network. They're the people who make it possible for me to be where I am and do what I love. I don't just like them, I'm not just grateful to them, I need them. Their success is mine.

And so given that my coworkers aren't exploiting anyone (to the best of my knowledge) or doing anything else unforgivable, and given what they represent for me, I think it makes sense that I'm protective of them. And it would be a pretty soulless bastard who wasn't. And given how the walls around information and the mobility of capital and (kind of) labor are falling down, doesn't it make sense that the local factors like culture and distance might also fall in some cases?

"Western guilt" in some cases, is just that. But this article, and the nerve it's struck, make me think it might be something simpler. Gratitude.

But okay, so, how do you determine if you're helping? Well, inasmuch as you can know and trust and respect someone, you have to take their word for it. And when/if your employees don't ask for raises or don't complain about the workload or praise you as the best boss ever, you really can't know too much else unless you're a nosy boss who probably knows more than s/he should, which, even given the vast income disparity, is respecting privacy, one of the most basic, fundamental things you can extend to a person. Okay, but you still want to help...well, how well do you know the country you've outsourced to? How well do you know the families, what they need? Fine, if you really want, and they welcome it, you can pay for their children's college and cure grandma's cancer. But let's say you're the guy making $90,000 a month, or your employees swear they're doing fine, even after you show them your fancy American flush toilets and cell phones (and chances are good that if outsourced staff in a third-world country have the wherewithal to work for you, they have those things too). Well, you can only go by what you know about others in that country, if you still want to help, and since you know that pretty much everyone needs food, clothing, education, and a little loan to start their businesses, you do what you can to provide that to the people who don't have it.

I can understand how he arrives at the conclusion he does, without guilt. I don't know if he's taken it too far or something, or not done enough, but I can definitely see how someone could think that way. Cut the man some slack. It might not be guilt.
posted by saysthis at 3:55 AM on May 26, 2010


And, you know, brutal supression of any attempts to organise for better pay and conditions by central government, disregard for envrionmental externalities, and currency manipulation.

At least as concerns pay it has not been necessary to organise more than has been done, since wages for workers has been growing quite briskly last decades.
posted by Catfry at 4:05 AM on May 26, 2010


Capital moves freely.

Labor doesn't. Or can't.

This is the problem.
posted by Civil_Disobedient at 4:18 AM on May 26, 2010 [10 favorites]


Where's that Catfry? Wages have been essentially stagnant in the developed west (and Japan) and (for most people after the initial post-reform bounce) here in China for decades - such rises as have been seen in household incomes have largely been because more family members are having to take waged work to maintain relative living standards. When the social wage is considered, the picture in China looks even worse - even the Economist agrees.
posted by Abiezer at 4:28 AM on May 26, 2010 [3 favorites]


rogerd: And, you know, brutal supression of any attempts to organise for better pay and conditions by central government, disregard for envrionmental externalities, and currency manipulation.

I can't speak knowledgeably about those first two issues, although from what I've seen, you're probably right about them, but currency manipulation? All they're doing is holding their currency at a particular par level with ours. Our currency is trying to drop, and theirs is trying to rise, so to hold them at par, they have to print yuan and use them to buy dollars. in essence, they've been importing our inflation. (that's part of why they have over a trillion dollars in reserves). This massive liquidity, courtesy of the Fed, is setting off bubbles all over China, and digging themselves back out of that mess is going to hurt plenty.... but not as much as it's going to hurt us.

The primary thinking, when people say that the Chinese should let the dollar drop and yuan appreciate, is that it will make the relative costs for labor more level. But they're starting from such an overwhelming advantage that even if their currency quadrupled related to the dollar, which it eventually probably will, they'd still be at a tiny fraction of our costs to pay workers to make any low-skill good.

That should also have the effect of making commodity imports cheaper for them. Commodities are such a large fraction of their costs, relative to their labor, that if anything, a stronger yuan should make their goods cheaper from our perspective, and accelerate the growth of the trade deficit. Meanwhile, our purchasing power for goods that didn't come from China would drop quite noticeably.

Our central monetary authority's drive is to prevent all economic pain, ever, and it's willing to inject any amount of liquidity necessary to make that happen. That trade deficit should be killing us. It should be sucking lots of money out of the country, throwing our economy into a tailspin, forcing us to switch to more exports to buy those dollars back. But no matter how many go overseas, we'll just make more, so we don't properly feel the pain of our over-consumption, and make the necessary adjustments to stop the bleeding.

If anyone's guilty of currency manipulation in this mess, it's not the Chinese.
posted by Malor at 4:57 AM on May 26, 2010 [1 favorite]


It's really interesting to watch this guy come to the conclusions that sociallist and anarchist thinkers realized over a century ago completely de novo. Because you can tell he's never read a scrap of non-capitalist theory in his life. When someone so entrenched in the capitalist system starts thinking this way, it portents that capitalism may finally be starting to be seen as obsolete.
posted by Jon_Evil at 5:34 AM on May 26, 2010 [2 favorites]


When someone so entrenched in the capitalist system starts thinking this way, it portents that capitalism may finally be starting to be seen as obsolete.
Really? It looked to me like the conclusion he came to was that outsourcing provided short-term benefit to both him and the people he paid, and that he'd like to take some of that profit and spend it on effecting social change in the countries in which his 'employees' work. How is capitalism rendered obsolete by any of that?
posted by henryaj at 6:15 AM on May 26, 2010


So we should "help" those who live in less wealthy countries by refusing to give them jobs? I'm sure they'll be very grateful.

Yeah, I bet those Foxconn employees are real happy about their jobs. The ones who are still alive, anyway.
posted by antihostile at 6:15 AM on May 26, 2010 [1 favorite]


and furthermore, is water wet? i think it just might be.
posted by armitage at 6:24 AM on May 26, 2010


In the IT world, offshore* outsourcing is generally considered a failure, and everyone's going back to H1B mass-importation.** It's usually for the same reason IT start-ups don't take off in places like Oxnard, Missisippi - the culture required by successful companies isn't in place, and is tied regionally. Silicon Valley and Boston offer opportunities for programmers and managers to understand the technology, methods and practices that make a multi-gazillion dollar venture work. If we can't export Silicon Valley to Mississippi or West Virginia, we sure as hell can't export it to Mumbai.

In the meantime, Mumbai is fostering its own culture of success - and it involves creating its own industries for its own customers, not simply in supplying a labor pool. Outsourcing gave them an insider's view on the products and customers they can target, and now they're going after them with top-flight talent, and the losers and newbies are all that's left for foreigners looking for a cheap headcount.

So, now we're seeing these "moral conundrums" for former outsourcing mavens - they've failed to do anything but set up new competitors, and are backtracking as fast as they can.

(*Outsourcing certain functions to outside companies is still popular, especially for small shops who need big-shop services, like network security. But that's not really the same thing as firing your programmers to replace them with $4/hr Moldavian programmers.)

(**Which isn't working, either, and for the same reasons it didn't work the first time: once they have some solid experience, they expect to be paid for it. They're not stupid - it's why you brought them over in the first place - so they know the going rate, and they're going to apply for a green card sooner rather than later, and bring over the family. As a highly skilled professional, they're going to get it, too. So you're really only saving money on entry-level workers, and those savings are eaten up with legal and recruiting hassles. )
posted by Slap*Happy at 6:34 AM on May 26, 2010 [1 favorite]


This gets a big "well duhhh" from me.

Look, look what you made me do!.
posted by Theta States at 6:44 AM on May 26, 2010


In my industry (hand knitting design), we actually have a way of doing this that isn't horribly exploitative -- there's a company that outsources knitting work to a region in South America with terrible unemployment, and not only gives them work at a great local wage but also invests time and money in training them with additional job skills. They are allowed to choose how much or how little work they want each week. They can work around their childrens' school schedules. And the company who facilitates this helps to run a cooperative that provides all manner of social services that wouldn't otherwise be there.

We (the designers here in the US) are making the same wages as we were paid in the 1980s, once you account for inflation and whatnot. The photographers, magazine layout people, etc are making 5 times what they made then, if not more. You could argue that we're being exploited at some level, too (and trust me, people make that argument all the time).

Are we outsourcing our own exploitation and making it double-exploity, or are we managing our time and resources in the best way we can, while choosing to partner with people who truly do need, want and enjoy the outsourced work we can provide? From what I know about the knitters on the other end of this, if it weren't for this, they'd have NO work, so I don't feel particularly bad about sending them work to do and paying them enough money to keep their kids in school and otherwise live a decent life. And it frees me up to do more pure design work, which means I have more work for them to do, and the cycle continues...
posted by bitter-girl.com at 7:02 AM on May 26, 2010 [1 favorite]


wages for workers has been growing quite briskly last decades.

Where's that Catfry? Wages have been essentially stagnant in the developed west (and Japan) and (for most people after the initial post-reform bounce) here in China for decades - such rises as have been seen in household incomes have largely been because more family members are having to take waged work to maintain relative living standards. When the social wage is considered, the picture in China looks even worse - even the Economist agrees.

I meant wages in China have been growing fast for workers. The problem I have is that I respect your opinion and know that you have a well developed view on the economic situation of workers, but which I do not entirely agree with. Unfortunately I'm not an economist and I have no desire to slog it out, trying to learn as the discussion develops.

I did skim the Economist link you gave, but as far as I can tell it only said that wages as a percentage of total growth has shrunk. That doesn't mean they haven't been growing though.

The link I will give you is one to the China Statistical Yearbook, compiled by the National Bureau of Statistics of China. Fortunately it is online and you can look up figures for a wide variety of aspects of China:

http://www.stats.gov.cn/tjsj/ndsj/2009/indexeh.htm

Click on 'Employment and Wages' and then, for example, 'Average Earning of Employed Persons in Urban Units and Related Indices'. Note these are NOT corrected for inflation!
posted by Catfry at 7:03 AM on May 26, 2010


There are also options to view by sector but it is more cumbersome to compare to other years.
posted by Catfry at 7:05 AM on May 26, 2010


This article is at the cutting edge of radical politics...
posted by ReWayne at 7:55 AM on May 26, 2010


Choosing to pay an American $100,000 instead of an Indian $10,000 when both are equally qualified is blatant discrimination.

One can outsource exploitatively, for example by paying low wages by that region's standards, or by forcing people to work, or by providing horrible working conditions, but outsourcing is not itself exploitative. It's actually better for everybody, on average.

(Making sure that not all the wealth goes to the already wealthy is a fundamental problem in capitalism which has various solutions like progressive taxation, social spending, and foreign aid, but more efficient markets generate more wealth and are a good thing. Assuming we engage in some sort of redistribution, it's overall better for everybody to pay the Indian $10,000.)
posted by callmejay at 8:03 AM on May 26, 2010 [1 favorite]


I wouldn't want to pretend to be an economist either, Catfry, but am reporting the general imression I've gleaned over many years with an interest in that sector - here's something recent from Yasheng Huang who I mentioned above that I think makes a similar point, that the rise of rural incomes have stagnated since the mid-90s at least:
But many observers failed to ask a basic question: “Where did the government of such a low- income country get the money to finance all this impressive urban infrastructure?” The answer: rural China. In the 1990s, as skyscrapers sprang up in Beijing and Shanghai, the rate of rural income growth went down. Low income growth then led to low consumption growth. Household consumption fluctuated between 40 and 45 percent of GDP throughout the 1990s but then began a decline in 2000, from 46 percent to today’s 35 percent. (In most other countries, consumption usually averages between 60 and 70 percent of GDP.) This was the beginning of the economic imbalances that put production far ahead of consumption— facilitated, one should add, by de mand created by excessive American consumption fueled by credit bubbles. The trade tensions with the United States and all the charges and counter charges about currency manipulation are basically the result of this startlingly low consumption/production ratio.

How did rural Chinese fare in the 1990s? Not very well. Their income growth rate fell sharply, from seven to eight percent annually in the 1980s to around four percent in the 1990s. At the same time, surcharges by the state on basic education and health care services rose, increasing economic pressures on families and reducing their ability to buy goods and services.

One avenue of material improvement remained open to rural Chinese: migrating to the coastal cities to work in factories. Many took this route. There is no question that the pay in urban centers was much better than it was on farms back home. But the flood of workers depressed wages in the cities. In Guangdong Province, average pay for migrant workers increased at only about one- third the rate that GDP did. Slow wage growth meant that Chinese migrant workers, unlike middle-class urbanites elsewhere in the world, were not able to consume much of what they produced. But the excess production had to find a market. China became an export- driven economy as a result.
And the social wage I mentioned is important - the experience of laid-off urban workers losing health benefits, sometimes housing access and so forth does of course mean that even a higher cash wage (if they are able to find work again, realistically their children) doesn't go as far in terms of providing a secure living.
posted by Abiezer at 9:44 AM on May 26, 2010


Oops, forgot the link.
posted by Abiezer at 9:45 AM on May 26, 2010


obligatory *facepalm*
posted by liza at 5:51 PM on May 26, 2010


The problem, as I see it, is not that outsourcing is exploitative of non-Westerners; the problem is that it is short-sighted and self-destructive for the West. Morality may be at issue here on an individual level, but that's not the crisis. What's blowing up is that individualism itself, and everything that is built on that ideology - not just the American ideal of meritocratic capitalism but freedom and justice as well.
Meritocratic capitalism? Because people in other countries couldn't possibly have any merit? If the argument is that this undercuts the political support for capitalism in general, I say bring it on. Asking capitalists to leave money at the table like asking water to flow uphill.

The entire foundation of capitalism is that acting in financial self interest is supposed to increase overall good. If, suddenly acting in financial self interest is somehow undermining capitalism, then capitalism is intrinsically unstable to begin with.
Yeah, I bet those Foxconn employees are real happy about their jobs. The ones who are still alive, anyway.
Are you talking about all but the one who killed himself over leaking an iPhone prototype? They probably like their jobs more then working in a farm equipment factory, or as construction workers, or whatever they would be doing if China didn't become a major exporter ala Germany.
posted by delmoi at 12:56 PM on May 27, 2010


The ideal of meritocratic capitalism, as in the American Dream. It has at least something to do with America and being American. (I did not say that people in other country don't have merit - I said the opposite. But assuming that governments or cultures across the world uphold meritocracy as an ideal is arrogant and just plain wrong.)

The entire point of my post was that global capitalism in a world made of nations exposes the limitations of capitalism, because it makes painfully clear - with far-reaching and long-lasting consequences - that individuals and corporations acting in financial self-interest doesn't increase overall good without a lot of regulations, oversight and financial walls. Or what Civil_Disobedient said ^.

Of course it's unstable. (Reduced and applied dogmatically, it's a damn lie.) Before outsourcing, among other things, the US was doing a better job of protecting its money and its people from that very instability.
posted by mondaygreens at 3:02 PM on May 27, 2010


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