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Dude, where’s my career?

Richard R Plourde

Okay, okay! I give up! You win! It’s fait accompli. “What is?” you ask. My career, it’s gone, truth be known many other career fields will follow. Without trying and unburdened with preconceived notions, goals, or intentions the road has been traveled. That’s right, no planning, objectives, contingencies, or solutions; only haphazard causes, yielding unforeseen effects. Given the corpse, I’ll perform the autopsy. Our new world economy has experienced a paradigm shift away from the ‘business as usual’ of the past. Our new global political stability allows capital and technology to flow to the developing world’s highly educated workforce and be managed over a high-bandwidth communications network.

I find this a complex problem to solve. It centers on the quest for free trade and how the doctrine of free trade is being challenged while many economists are in deep denial. Our modern global economy appears to be shooting holes in the very foundation of free trade of the past. Workers in India, Israel, Russia, China, and elsewhere are ready, willing, and able to perform highly technical services in many career fields. This presents a situation never before possible.

Ricardo and free trade theory

British economist David Ricardo’s principle of ‘comparative advantage’—the idea that each nation should specialize in what it does best and trade, with other nations, for other needs. This would allow productivity to be highest and each nation would share part of the global economy. This assumes the resources used to produce goods—what he called the ‘factors of production’—would not be easily moved over international borders. Comparative advantage is undermined if the factors of production can relocate to wherever they are most productive. In today’s case, relocate to a relatively few countries possessing abundant cheap labor. In this situation, there are no longer shared gains—some countries win and others lose.

Comparative advantage

True enough about comparative advantage, but unfortunately, it doesn’t stop with goods because India (and Israel, Russia and others) are being used for the outsourcing of software, radiological, and information technology work. Comparative advantage has always been applied to goods, such as textiles and wine; now the problem is something else is happening. It’s the Internet and digitization of so many ‘products’ that can be shipped around the world in less than a second. So, it used to be capital and goods that flowed across borders; now the ‘work’, adding value, can be performed in another country. Thus, the product, via the Internet, appears as if it has never moved. This means that labor was effectively, and magically shipped here. Freaky isn’t it? So, this labor is being paid and taxed in a foreign country and even working for a company which will make profits and pay taxes (if at all) in a foreign country. Isn’t that a kick in the head?

Free trade with fair trade

I’m not a protectionist but I do believe free trade should also be fair trade. Workers the world over should have equal rights of access to safe, healthy working conditions; and should never be exploited with, for example, forced or child labor. This is basically a call for a level playing field.

The bottom line is the bottom line

Well, what will all these factors bring to bear on the government revenues? That’s another feature of the reorganization. The politicians will have to transition from goods to services for income. This means sales tax will produce less and that they’ll need to introduce taxes for services, something like a value added tax, which has crippled the United Kingdom’s economic growth.

Job loss recovery

Contrary to the spin of the current administration, economists, market analysts, and most politicians this is not a jobless recovery. It’s a job loss recovery. Yes, productivity is up but understand that productivity rises for many reasons. Accomplish the same with fewer employees then productivity goes up. Move labor-intensive jobs offshore then productivity goes up. Work the employees harder then productivity goes up. The stock market doesn’t need corporations hiring more employees it wants them to do more with less. Hence, when productivity increases the market rises. Wall Street is not the economy and this job loss recovery is fine with them because the jobs are not lost they’re just relocated offshore. In the long run the nations standard of living will fall to meet the level of the developing nations rising standard of living. This could mean a stable global community and, in the long run, could be a good thing. Problem is the long run could be 20 or 30 years! ARRGHH!!!

Race to the bottom

Well, Bush has announced his new immigration policy, which he states is not a form of amnesty because it doesn’t convey citizenship and it’s only good for 3 years, right George 3 years but renewable. This policy is now known as the ‘no Wal-Mart left behind’ plan. While I’m on the subject, did you know that if Wal-Mart were a country it would rank as China’s fifth largest trading partner? Oh, speaking of China, guess who is the second largest carrier of the United States debt. Right, China of course.

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