Re: How long until IT employment vanishes ?

From: JF Mezei (jfmezei.spamnot_at_istop.com)
Date: 11/09/03 

Date: Sun, 09 Nov 2003 15:51:29 -0500

leslie wrote:
> http://www.vdare.com/roberts/us_china_econ.htm
> 09/29/03 - Statement of The Honorable Paul Craig Roberts, Ph.D. Before
> the U.S.-China Economic and Security Review Commission

> What we are witnessing in part is the loss of a sense of national
> identity. Many things have brought about this loss of identity. Open
> borders, massive immigration of third world peoples, attacks on
> American identity by cultural Marxists and post-modernists. Many
> things are eroding a sense of cohesiveness. A tower of Babel is not a
> country.

None of that propaganda is right. Free trade in fact will reduce immigration.
Make poor countries richers and their cistizens won't have a motivation to
emigrate to richer countries.
The cost of that is that the western countries must now COMPETE against lower
cost countries.

If the USA wants to "inflict" its ideas of capitalism, freedom democracy etc
onto the rest of the world, then it must accept ALL of the results of those
changes, even if they are not to the advantage of the USA at some levels.

If India has a better educated workforce who works for less compared to the
USA (or any other western country) then what is wrong ?

And you don't have to look further than inside the USA to see the effects of
competition on the labour force. Why is Wallmart so succesful ? It is in part
because it pays its employees less (or they work more) which allows it to save
money and shoppers save a few bucks.

Why is Southwest Airlines so succesful while the other big airlines in the USA
are either in or on the brink of bankrupcy ? Because Southwest has hired
workers who get paid less, and have much more versatile work rules, allowing
the airline to have far more efficient operations and operate with less staff overall.

When competition starts to occur on price only, then one of the expected
results is significant downward pressure on the standard of living of employees.

> Our approach to the world is based on the assumption that we are
> experiencing free trade. If, instead, we are experiencing the flow of
> factors of production to absolute advantage, our entire trade policy
> will need to be revised.

You get what you ask for. You want free trade, you get free trade. If you want
to sell your wares to india, you need to be competive. Perhaps the USA
expected "free trade" to mean that the USA would be able to export its
products to any country and not bother having to import products.

And the irony is that the current debate conerns not products but services
which are not really covered by trade deals since they go through no customs.

For as much as people despise VAT/GST, those government that did implement it
were wise. They saw the coming of the "age of the service industry" (as
opposed to "industrial age") and saw the importance of taxing services.

In Canada, there are rules to determine whether a service is provided in
Canada or not, which determine if the service is taxable or not. (those rules
can be murky at times).

And if I hire some indian firm to provide service to me in Canada via
telephone, I will have to pay GST on that (considered an import). This puts
the indian firm on the same footing as a canadian firm from a tax point of
view. (and yes, one is expected to self declare that indian service you
imported - on the other hand, if you resell that service, then the tax you
self-declared becomes refundable).

And while provincial sales taxes are a mess with regards to internet sales, in
canada, any canadian company must charge the federal GST to any customer
residing in canada.

One must really look at the big picture of globalisation, and virtualisation
of goods and services. Shipping widgets from japan to Los Angeles on a boat is
no longer what the economy is about. Buying services over the phone or
internet is what it is about. And governments must really take a serious look
at this change because it is also part of the issue of labour moving offshore.

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