Terry Reedy said:
Didn't get this one, so I'm answering both here...
To me, the global information economy is as real as the global Python
community.
Indeed, they strongly intersect. I couldn't afford to go from Italy to
OSCON if I didn't get half of my expenses covered by a Swedish client,
and I took advantage of the trip to consult for a US client, interact
with US publishers who sell my books all over the world, make friends
with a Briton who works for a US multinational (currently enmeshed in a
bitter fight with a British music company whose name they stole;-) who
also make the laptop I use, and the music player my son just bought to
listen to his favourite groups from all over the world... oh, and on my
way to OSCON I married a US citizen in Minneapolis -- we had half our
honeymoon at OSCON, the second half in the Italian Alps. We had
announced our forthcoming marriage at Europython, in Sweden, right after
a keynote speech by a South African who showed many photos from his
space trip, which he had taken on a Russian spacecraft...
To the extent that all US employers producing similar products have equal
access to such cost savings, the long-term competitive benefit should tend
toward zero and most benefit should go to consumers and non-US workers. It
was Indian software entrepreneurs who pursued US businesspeople more than
the reverse.
Any voluntary economic transaction benefits both parties to it (in their
own opinion), otherwise they wouldn't take part in it. Of course their
opinions may be mistaken, but there's no reason to believe that somebody
else knows better than they do, thus, no case for coercion, in general.
I did not try to quantify in my original statement. However, it takes more
than a few people to get myriads of job protection laws passed in countries
around the globe. Dislike of competition for 'my job' is pretty universal.
Yep, pretty much. Or "my customers" and "my suppliers", for that
matter; deep down, any maker of (say) cloth would love all the wool
producers to be forced to sell to him, all the clothing makers to be
forced to buy the cloth from him. Though in the long run we'd all be
better off with freedom for all, the temptation to lobby for an even
better deal for myself -- freedom for all _except_ those who buy from
me, sell to me, employ me, are employed by me, ..., all of whom should
obviously be constrained to do what _I_ want, not what _they_ like -- is
always present.
[snip]
let's ...have laws that require employers to pay prevailing wage
The prototype 'prevailing wage' law in the US, the 1930s Davis-Bacon Act,
was passed and signed by begruding people. It had the explicit purpose
(and effect) of excluding dark-skinned Americans from participating in the
American construction industry, especially in northern states, by making it
unprofitable to hire them. Its negative effects continue today.
Very good point.
Heh heh, how funny. Yeah, let's hamstring IBM, Texas Instruments,
think3, Motorola, and all other companies of US or Europe origin, by
forbidding them to employ Indian programmers, salespeople, etc, etc,
directly, at normal Indian rates of pay; let's force them all to pay
_Wipro_ (or whoever) instead -- Wipro is of Indian origin, so it would
be allowed to pay normal Indian rates, and then it could add, say, 20%
profit on top, and resell the software or services those employees
produce to IBM, TI, think3, and so forth. Why allow IBM to sensibly
keep Indian offices, just because it's had them for fifty years, after
all? Just because (say) an IBM salesman in India has a cost of living
that's 1/3rd as much as his counterpart in the Bay Area (if that), it's
surely no reason to allow IBM to employ that salesman directly to sell
IBM products in India, is it? Let's force IBM to pay Wipro, or whoever,
to hire that guy at normal Indian wages, instead, to sell IBM's products
on behalf of IBM. Now _that_ will surely fix everything. Let's
subsidize Wipro at IBM's, TI's, etc, expense, yeah, that's the ticket.
It will be hard on the US retirees who directly or indirectly own most
IBM or TI stock, of course, since IBM's expenses will go up and profits
down, right out of the pockets of mostly-US, mostly-small stockholders,
and into the pockets of Wipro stockholders, mostly substantial Indian
entrepreneurs and capitalists (darn few pension funds or small
individual stockholders those parts). But hey, I'm sure Azim Premji and
the rest need the money much more than John Smith needs his TI dividends
to help pay for his retirement...
Programmers in developing countries generally are employed by local
employers who pay them more than the previous local prevailing wage. In
Most programmers in developing countries are indeed employed by local
employers, but far from all: large-enough American and European
companies often prefer to open their own branch offices, and hire
locals, rather than operating indirectly through Wipro and the like,
which would basically mean letting Wipro, etc, just cream off a
middleman's fee. The wages paid by Wipro and friends, or by IBM,
think3, TI, Motorola, etc etc, are of course very comparable: it's a
highly competitive labor market with a lot of mobility, nobody would get
away with paying less than other employers, not if they have any hope of
keeping their best people, at least.
The market for salespeople is somewhat similar. Large companies who are
trying to sell directly to the local markets often prefer to hire their
own salespeople directly, for all sorts of reasons, rather than
outsourcing all of their sales efforts to local firms. But of course if
they had to pay local salespeople three times as much as local firms are
paying the same salespeople, they'd demur -- they would pay the
commissions / middleman fees / etc to the local firms, as well as
resigning themselves to selling less (a typical local firm reselling,
say, HP printers, is likely to also offer other cheaper competing
brands; so, if HP wants to make sure they sell printers, they would
really like an HP-owned branch office... but couldn't afford one if the
same salespeople cost three times as much when employed directly by HP,
as when employed by a local firm selling the same HP products...!-).
terms of real economic goods -- food, clothing, housing, internet service,
and so on -- their pay may be comparable to that of programmers in the
'industrial' nations.
It's hard to compare, because the basket of real economics goods and
services consumed tends to be SO different, depending on local mores and
local economic realities. I haven't been in close touch with Indian
realities for a while, but my first wife had her major in Hindi, often
traveled there, had local friends and university colleagues who had set
up import-export arrangements with India, etc, etc. At that time, the
concept that a fledging professional (me at the time) would own a car
AND a motorbike, TWO TV sets, two cameras, etc, etc, appeared to feel
almost incredible to her Indian friends. On the other hand, the idea
that said professional had to waste his precious time cooking, cleaning
house, tending the garden, etc, rather than just hiring two or three
domestic labourers for these purposes, was just as incredible to them
(well, my grandmother never really accepted the world could change so
deep and so fast -- in _her_ youth, even in Italy, a car was a silly
rich man's luxury, but _of course_ a middle-class family would have at
least a couple of people working for them as domestic help!).
Basically, easily transportable/tradable goods and services tend to have
more similar prices across different economies -- not considering
absurdly high and punitive tariffs that distort things (generally
raising the prices of clothing here, of cameras in India, etc), a shirt
or a camera should cost the same here and there. Goods and most
particularly services that _aren't_ easily transportable and tradable
are quite a different story; my barber charges me ten times as much as a
Mumbai barber would, taking advantage of the cost and inconvenience it
would be for me to have my head sent to Mumbai for hairstyling...
.
Their apparent cheapness per comparable output is largely a function of
exchange rates at least partly distorted by centuries of government force.
I don't think exchange rates are that badly out of whack, nor that the
legacy of centuries has much importance determining the rates of today.
Itay has been united as a single country for over 140 years now, so
exchange rates don't enter into it; yet the cost of living in some
small, half-forgotten southern village versus, say, downtown Milano, is
_quite_ skewed anyway. That IS quite a problem for jobs which pay the
same in both places: a school teacher is still quite well to do in the
little southern village, he's a pauper in downtown Milano.
So why doesn't all of Italy's industry and software production RUSH
southwards...? Hey, there's even plenty of government subsidies
available to lure firms there. And yet it doesn't happen, because firms
still mostly judge that the higher productivity of the North (better
infrastructure, rule of law working better, easier contact with
suppliers and customers, more potential employees milling around, ...)
trumps the cheapness and the subsidies of the deep South.
I expect such distortions will lessen as communication makes them less
tenable. I also expect increasing numbers of US knowledge/information
workers with portable skills to take advantage of the distortions while
they last.
To some extent, maybe. 140+ years of Italian unity -- no legal barrier
whatsoever to living or setting up a firm wherever you prefer, no
exchange rate to worry about, etc, etc -- haven't really done much to
lessen economic differences between North and South here, nor has there
been any rush whatsoever of professionals southwards, on the contrary,
the net movement has most definitely been northwards. And aren't things
developing similarly in, say, Spain, or Germany (East vs West)...?
The US _has_ seen substantial economic growth in the "sun belt", true,
but I think it's a reasonably recent phenomenon, isn't it? For over 100
years, say from your Civil War to the 1960's, wasn't, e.g., Alabama, WAY
poorer than, e.g., Massachussets -- way lower wages, cost of living,
etc... -- and yet, no rush of industry or professionals along that
gradient....? (Come to think of it, I don't think the difference has
been even nearly wiped out yet -- for some parts of the South, yes, but,
what about Alabama for example...?).
Personally, I think there will be _some_ modest reduction of
differences, and movements back and forth, if legal barriers can be
lowered a bit (I don't consider that lowering a certainty), but, judging
from these historical examples, I don't think it will reduce diffences
by ALL that much...
Alex
