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Helsing: Aug 23, 2003; MY FAVORITE GAME OF ALL TIME IS SUPERMAN 64

When this essay was first written in 1943 World War II was still raging and the Great Depression was a recent memory. Yet the political situation that Michal Kalecki describes here is eerily familiar to the one we face today.

One thing that can be said for the Depression and the War is that they utterly annihilated the myth of ineffective government. The remarkable and persistent failures of private industry during the 1930s contrasted sharply with the full employment and rapid growth in living standards that most people experienced during the war. In essence the Allied Powers had to become de facto socialist economies with tight controls on wages and prices, government direction of private investment and tight regulation of most economic activity. While its worth noting that captains of industry were invited into the halls of power under this system and placed in charge of the economy (as opposed to private industry being completely subservient to a government appointed committee), this was nevertheless a mostly centralized planned and controlled economic system dedicated toward the full employment of resources for specific government ends.

The war years fundamentally changed the relationship of people to the government. During the war the Roosevelt administration had disproportionately taxed people with high incomes while allowing the real wages of most workers to increase. The result was a huge rise in living standards for ordinary people:

Simultaneously the relative income and wealth of people at the top was greatly reduced by the taxation policies of the war years. That in turn produced a much more equal distribution of income amongst the population that persisted until the 1980s.

After the war the government used its newly augmented capability to manage the economy through a mixture of guided investments, purchases and taxation to try and actively encourage economic growth. There was immense fear in the business community that the end of the war economy and reconversion to civilian production was going to result in a return to the slump conditions of the 1930s so the business community was happy to tolerate renewed government spending and investment, provided that it was focused on military industries (more on this later).

Far from a return to the 1930s, this arrangement produced (or at least coincided with) a huge economic boom, still remembered as a 'Golden Age' of capitalism, from the late 1940s until the mid 1970s:

(I pulled these graphs off Wolfram Alpha)

It was only once the war had started to fade from memory that it became possible for Conservatives to ressurect their more dogmatic arguments about the government's inability to help people (and to rebuild that myth they had to attach it to a fundamentally racist critique of Welfare and Social Security that generated resentment against the government by telling white men that they were being taxed so that "other" races could benefit).

Today we are still caught in the midst of the worst economic downturn since the Great Depression. Yet the business community seems to largely oppose intervention in the economy. Why? The lesson of the 20th century would seem to be that heavy state involvement in the economy can produce much higher output and stimulate demand for the entire economy. Why would we so actively turn away from the lessons of the last Great Depression and the War that followed it?

This essay by Michal Kalecki provides one possible answer, and some of the implications of this answer are quite alarming.

If the economy continues to stagnate, as many fear that it will then we can expect US state intervention into the economy to gradually increase. If this occurs in an atmosphere where big business remains dominent then we are forced to ask: what sort of political reforms will they insist on before tolerating a real full employment economy? Kalecki's essay suggests that the conventional price for purchasing the business class's acceptance of a full employment economy might be the end of political democracy.

Political Aspects of Full Employment, Michal Kalecki, Political Quarterly, 1943 posted:

Political Aspects of Full Employment1

by Michal Kalecki

I

1. A solid majority of economists is now of the opinion that, even in a capitalist system, full employment may be secured by a government spending programme, provided there is in existence adequate plan to employ all existing labour power, and provided adequate supplies of necessary foreign raw-materials may be obtained in exchange for exports.

If the government undertakes public investment (e.g. builds schools, hospitals, and highways) or subsidizes mass consumption (by family allowances, reduction of indirect taxation, or subsidies to keep down the prices of necessities), and if, moreover, this expenditure is financed by borrowing and not by taxation (which could affect adversely private investment and consumption), the effective demand for goods and services may be increased up to a point where full employment is achieved. Such government expenditure increases employment, be it noted, not only directly but indirectly as well, since the higher incomes caused by it result in a secondary increase in demand for consumer and investment goods.

2. It may be asked where the public will get the money to lend to the government if they do not curtail their investment and consumption. To understand this process it is best, I think, to imagine for a moment that the government pays its suppliers in government securities. The suppliers will, in general, not retain these securities but put them into circulation while buying other goods and services, and so on, until finally these securities will reach persons or firms which retain them as interest-yielding assets. In any period of time the total increase in government securities in the possession (transitory or final) of persons and firms will be equal to the goods and services sold to the government. Thus what the economy lends to the government are goods and services whose production is 'financed' by government securities. In reality the government pays for the services, not in securities, but in cash, but it simultaneously issues securities and so drains the cash off; and this is equivalent to the imaginary process described above.

What happens, however, if the public is unwilling to absorb all the increase in government securities? It will offer them finally to banks to get cash (notes or deposits) in exchange. If the banks accept these offers, the rate of interest will be maintained. If not, the prices of securities will fall, which means a rise in the rate of interest, and this will encourage the public to hold more securities in relation to deposits. It follows that the rate of interest depends on banking policy, in particular on that of the central bank. If this policy aims at maintaining the rate of interest at a certain level, that may be easily achieved, however large the amount of government borrowing. Such was and is the position in the present war. In spite of astronomical budget deficits, the rate of interest has shown no rise since the beginning of 1940.

3. It may be objected that government expenditure financed by borrowing will cause inflation. To this it may be replied that the effective demand created by the government acts like any other increase in demand. If labour, plants, and foreign raw materials are in ample supply, the increase in demand is met by an increase in production. But if the point of full employment of resources is reached and effective demand continues to increase, prices will rise so as to equilibrate the demand for and the supply of goods and services. (In the state of over-employment of resources such as we witness at present in the war economy, an inflationary rise in prices has been avoided only to the extent to which effective demand for consumer goods has been curtailed by rationing and direct taxation.) It follows that if the government intervention aims at achieving full employment but stops short of increasing effective demand over the full employment mark, there is no need to be afraid of inflation.2

II

2. The above is a very crude and incomplete statement of the economic doctrine of full employment. But it is, I think, sufficient to acquaint the reader with the essence of the doctrine and so enable him to follow the subsequent discussion of the political problems involved in the achievement of full employment.

In should be first stated that, although most economists are now agreed that full employment may be achieved by government spending, this was by no means the case even in the recent past. Among the opposers of this doctrine there were (and still are) prominent so-called 'economic experts' closely connected with banking and industry. This suggests that there is a political background in the opposition to the full employment doctrine, even though the arguments advanced are economic. That is not to say that people who advance them do not believe in their economics, poor though this is. But obstinate ignorance is usually a manifestation of underlying political motives.

There are, however, even more direct indications that a first-class political issue is at stake here. In the great depression in the 1930s, big business consistently opposed experiments for increasing employment by government spending in all countries, except Nazi Germany. This was to be clearly seen in the USA (opposition to the New Deal), in France (the Blum experiment), and in Germany before Hitler. The attitude is not easy to explain. Clearly, higher output and employment benefit not only workers but entrepreneurs as well, because the latter's profits rise. And the policy of full employment outlined above does not encroach upon profits because it does not involve any additional taxation. The entrepreneurs in the slump are longing for a boom; why do they not gladly accept the synthetic boom which the government is able to offer them? It is this difficult and fascinating question with which we intend to deal in this article.

The reasons for the opposition of the 'industrial leaders' to full employment achieved by government spending may be subdivided into three categories: (i) dislike of government interference in the problem of employment as such; (ii) dislike of the direction of government spending (public investment and subsidizing consumption); (iii) dislike of the social and political changes resulting from the maintenance of full employment. We shall examine each of these three categories of objections to the government expansion policy in detail.

2. We shall deal first with the reluctance of the 'captains of industry' to accept government intervention in the matter of employment. Every widening of state activity is looked upon by business with suspicion, but the creation of employment by government spending has a special aspect which makes the opposition particularly intense. Under a laissez-faire system the level of employment depends to a great extent on the so-called state of confidence. If this deteriorates, private investment declines, which results in a fall of output and employment (both directly and through the secondary effect of the fall in incomes upon consumption and investment). This gives the capitalists a powerful indirect control over government policy: everything which may shake the state of confidence must be carefully avoided because it would cause an economic crisis. But once the government learns the trick of increasing employment by its own purchases, this powerful controlling device loses its effectiveness. Hence budget deficits necessary to carry out government intervention must be regarded as perilous. The social function of the doctrine of 'sound finance' is to make the level of employment dependent on the state of confidence.

3. The dislike of business leaders for a government spending policy grows even more acute when they come to consider the objects on which the money would be spent: public investment and subsidizing mass consumption.

The economic principles of government intervention require that public investment should be confined to objects which do not compete with the equipment of private business (e.g. hospitals, schools, highways). Otherwise the profitability of private investment might be impaired, and the positive effect of public investment upon employment offset, by the negative effect of the decline in private investment. This conception suits the businessmen very well. But the scope for public investment of this type is rather narrow, and there is a danger that the government, in pursuing this policy, may eventually be tempted to nationalize transport or public utilities so as to gain a new sphere for investment.3

One might therefore expect business leaders and their experts to be more in favour of subsidising mass consumption (by means of family allowances, subsidies to keep down the prices of necessities, etc.) than of public investment; for by subsidizing consumption the government would not be embarking on any sort of enterprise. In practice, however, this is not the case. Indeed, subsidizing mass consumption is much more violently opposed by these experts than public investment. For here a moral principle of the highest importance is at stake. The fundamentals of capitalist ethics require that 'you shall earn your bread in sweat' -- unless you happen to have private means.

4. We have considered the political reasons for the opposition to the policy of creating employment by government spending. But even if this opposition were overcome -- as it may well be under the pressure of the masses -- the maintenance of full employment would cause social and political changes which would give a new impetus to the opposition of the business leaders. Indeed, under a regime of permanent full employment, the 'sack' would cease to play its role as a 'disciplinary measure. The social position of the boss would be undermined, and the self-assurance and class-consciousness of the working class would grow. Strikes for wage increases and improvements in conditions of work would create political tension. It is true that profits would be higher under a regime of full employment than they are on the average under laissez-faire, and even the rise in wage rates resulting from the stronger bargaining power of the workers is less likely to reduce profits than to increase prices, and thus adversely affects only the rentier interests. But 'discipline in the factories' and 'political stability' are more appreciated than profits by business leaders. Their class instinct tells them that lasting full employment is unsound from their point of view, and that unemployment is an integral part of the 'normal' capitalist system.

III

1. One of the important functions of fascism, as typified by the Nazi system, was to remove capitalist objections to full employment.

The dislike of government spending policy as such is overcome under fascism by the fact that the state machinery is under the direct control of a partnership of big business with fascism. The necessity for the myth of 'sound finance', which served to prevent the government from offsetting a confidence crisis by spending, is removed. In a democracy, one does not know what the next government will be like. Under fascism there is no next government.

The dislike of government spending, whether on public investment or consumption, is overcome by concentrating government expenditure on armaments. Finally, 'discipline in the factories' and 'political stability' under full employment are maintained by the 'new order', which ranges from suppression of the trade unions to the concentration camp. Political pressure replaces the economic pressure of unemployment.

2. The fact that armaments are the backbone of the policy of fascist full employment has a profound influence upon that policy's economic character. Large-scale armaments are inseparable from the expansion of the armed forces and the preparation of plans for a war of conquest. They also induce competitive rearmament of other countries. This causes the main aim of spending to shift gradually from full employment to securing the maximum effect of rearmament. As a result, employment becomes 'over-full'. Not only is unemployment abolished, but an acute scarcity of labour prevails. Bottlenecks arise in every sphere, and these must be dealt with by the creation of a number of controls. Such an economy has many features of a planned economy, and is sometimes compared, rather ignorantly, with socialism. However, this type of planning is bound to appear whenever an economy sets itself a certain high target of production in a particular sphere, when it becomes a target economy of which the armament economy is a special case. An armament economy involves in particular the curtailment of consumption as compared with that which it could have been under full employment.

The fascist system starts from the overcoming of unemployment, develops into an armament economy of scarcity, and ends inevitably in war.

IV

1. What will be the practical outcome of the opposition to a policy of full employment by government spending in a capitalist democracy? We shall try to answer this question on the basis of the analysis of the reasons for this opposition given in section II. We argued there that we may expect the opposition of the leaders of industry on three planes: (i) opposition on principle to government spending based on a budget deficit; (ii) opposition to this spending being directed either towards public investment -- which may foreshadow the intrusion of the state into the new spheres of economic activity -- or towards subsidizing mass consumption; (iii) opposition to maintaining full employment and not merely preventing deep and prolonged slumps.

Now it must be recognized that the stage at which 'business leaders' could afford to be opposed to any kind of government intervention to alleviate a slump is more or less past. Three factors have contributed to this: (i) very full employment during the present war; (ii) development of the economic doctrine of full employment; (iii) partly as a result of these two factors, the slogan 'Unemployment never again' is now deeply rooted in the consciousness of the masses. This position is reflected in the recent pronouncements of the 'captains of industry' and their experts. The necessity that 'something must be done in the slump' is agreed; but the fight continues, firstly, as to what should be done in the slump (i.e. what should be the direction of government intervention) and secondly, that it should be done only in the slump (i.e. merely to alleviate slumps rather than to secure permanent full employment).

2. In current discussions of these problems there emerges time and again the conception of counteracting the slump by stimulating private investment. This may be done by lowering the rate of interest, by the reduction of income tax, or by subsidizing private investment directly in this or another form. That such a scheme should be attractive to business is not surprising. The entrepreneur remains the medium through which the intervention is conducted. If he does not feel confidence in the political situation, he will not be bribed into investment. And the intervention does not involve the government either in 'playing with' (public) investment or 'wasting money' on subsidizing consumption.

It may be shown, however, that the stimulation of private investment does not provide an adequate method for preventing mass unemployment. There are two alternatives to be considered here. (i) The rate of interest or income tax (or both) is reduced sharply in the slump and increased in the boom. In this case, both the period and the amplitude of the business cycle will be reduced, but employment not only in the slump but even in the boom may be far from full, i.e. the average unemployment may be considerable, although its fluctuations will be less marked. (ii) The rate of interest or income tax is reduced in a slump but not increased in the subsequent boom. In this case the boom will last longer, but it must end in a new slump: one reduction in the rate of interest or income tax does not, of course, eliminate the forces which cause cyclical fluctuations in a capitalist economy. In the new slump it will be necessary to reduce the rate of interest or income tax again and so on. Thus in the not too remote future, the rate of interest would have to be negative and income tax would have to be replaced by an income subsidy. The same would arise if it were attempted to maintain full employment by stimulating private investment: the rate of interest and income tax would have to be reduced continuously.4

In addition to this fundamental weakness of combating unemployment by stimulating private investment, there is a practical difficulty. The reaction of the entrepreneurs to the measures described is uncertain. If the downswing is sharp, they may take a very pessimistic view of the future, and the reduction of the rate of interest or income tax may then for a long time have little or no effect upon investment, and thus upon the level of output and employment.

3. Even those who advocate stimulating private investment to counteract the slump frequently do not rely on it exclusively, but envisage that it should be associated with public investment. It looks at present as if business leaders and their experts (at least some of them) would tend to accept as a pis aller public investment financed by borrowing as a means of alleviating slumps. They seem, however, still to be consistently opposed to creating employment by subsidizing consumption and to maintaining full employment.

This state of affairs is perhaps symptomatic of the future economic regime of capitalist democracies. In the slump, either under the pressure of the masses, or even without it, public investment financed by borrowing will be undertaken to prevent large-scale unemployment. But if attempts are made to apply this method in order to maintain the high level of employment reached in the subsequent boom, strong opposition by business leaders is likely to be encountered. As has already been argued, lasting full employment is not at all to their liking. The workers would 'get out of hand' and the 'captains of industry' would be anxious to 'teach them a lesson. Moreover, the price increase in the upswing is to the disadvantage of small and big rentiers, and makes them 'boom-tired.'

In this situation a powerful alliance is likely to be formed between big business and rentier interests, and they would probably find more than one economist to declare that the situation was manifestly unsound. The pressure of all these forces, and in particular of big business -- as a rule influential in government departments -- would most probably induce the government to return to the orthodox policy of cutting down the budget deficit. A slump would follow in which government spending policy would again come into its own.

This pattern of a political business cycle is not entirely conjectural; something very similar happened in the USA in 1937-8. The breakdown of the boom in the second half of 1937 was actually due to the drastic reduction of the budget deficit. On the other hand, in the acute slump that followed the government promptly reverted to a spending policy.

The regime of the political business cycle would be an artificial restoration of the position as it existed in nineteenth-century capitalism. Full employment would be reached only at the top of the boom, but slumps would be relatively mild and short-lived.

V

1. Should a progressive be satisfied with a regime of the political business cycle as described in the preceding section? I think he should oppose it on two grounds: (i) that it does not assure lasting full employment; (ii) that government intervention is tied to public investment and does not embrace subsidizing consumption. What the masses now ask for is not the mitigation of slumps but their total abolition. Nor should the resulting fuller utilization of resources be applied to unwanted public investment merely in order to provide work. The government spending programme should be devoted to public investment only to the extent to which such investment is actually needed. The rest of government spending necessary to maintain full employment should be used to subsidize consumption (through family allowances, old-age pensions, reduction in indirect taxation, and subsidizing necessities). Opponents of such government spending say that the government will then have nothing to show for their money. The reply is that the counterpart of this spending will be the higher standard of living of the masses. Is not this the purpose of all economic activity?

2. 'Full employment capitalism' will, of course, have to develop new social and political institutions which will reflect the increased power of the working class. If capitalism can adjust itself to full employment, a fundamental reform will have been incorporated in it. If not, it will show itself an outmoded system which must be scrapped.

But perhaps the fight for full employment may lead to fascism? Perhaps capitalism will adjust itself to full employment in this way? This seems extremely unlikely. Fascism sprang up in Germany against a background of tremendous unemployment, and maintained itself in power through securing full employment while capitalist democracy failed to do so. The fight of the progressive forces for all employment is at the same time a way of preventing the recurrence of fascism.

1 This article corresponds roughly to a lecture given to the Marshall Society in Cambridge in the spring of 1942.

2 Another problem of a more technical nature is that of the national debt. If full employment is maintained by government spending financed by borrowing, the national debt will continuously increase. This need not, however, involve any disturbances in output and employment, if interest on the debt is financed by an annual capital tax. The current income, after payment of capital tax, of some capitalists will be lower and of some higher than if the national debt had not increased, but their aggregate income will remain unaltered and their aggregate consumption will not be likely to change significantly. Further, the inducement to invest in fixed capital is not affected by a capital tax because it is paid on any type of wealth. Whether an amount is held in cash or government securities or invested in building a factory, the same capital tax is paid on it and thus the comparative advantage is unchanged. And if investment is financed by loans it is clearly not affected by a capital tax because if does not mean an increase in wealth of the investing entrepreneur. Thus neither capitalist consumption nor investment is affected by the rise in the national debt if interest on it is financed by an annual capital tax. [See 'A Theory of Commodity, Income, and Capital Taxation']

3 It should be noted here that investment in a nationalized industry can contribute to the solution of the problem of unemployment only if it is undertaken on principles different return than private enterprise, or it must deliberately time its investment so as to mitigate from those of private enterprise. The government must be satisfied with a lower net rate of slumps.

4 A rigorous demonstration of this is given in my article to be published in Oxford Economic Papers. [See 'Full Employment by Stimulating Private Investment?']

# ? Feb 2, 2013 19:57

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# ? May 23, 2013 16:40

ronya: Nov 8, 2010

Unfortunately, the hard endogenous-money Keynesian viewpoint espoused in the section I.1, from which everything else follows, is quite difficult to hold. The rest is quite coherent, but the foundation is non-obvious (to say the least); in the current zeitgeist, this is rather like positing a Laplacian demon-in-a-bottle and then writing a twenty thousand word essay on how it may best be used for the public good.

The popular understanding of economics has shifted so much that the sleight of hand is hard to notice. The central question is for how long the state can sustain the borrowing. In Samuelsonian neoclassical-synthesis neo-Keynesianism, it may do so only for as long the real interest rate is less than the real growth rate; as it borrows, the interest rate rises, and so there is a hard limit on how much it may borrow.

This is actually also the case in the Kaleckian outlook, as per footnote #2; the trick is that Kaleckians hold that the amount the state borrows doesn't interact with the real rate in the neoclassical fashion. The real interest rate is exogenously set by the central bank and can always be set at some level consistent with full employment. It's... complicated: capital controversy and endogenous credit and such.

It should also be noticed that

quote:

The reasons for the opposition of the 'industrial leaders' to full employment achieved by government spending may be subdivided into three categories: (i) dislike of government interference in the problem of employment as such; (ii) dislike of the direction of government spending (public investment and subsidizing consumption); (iii) dislike of the social and political changes resulting from the maintenance of full employment.

is not an especially good description of the Thirty Glorious Years across the west; the captains of industry very much liked the state-stabilized system. They did, of course, continue to contest for a larger share of the fruits and a smaller share of the taxes, but we did not observe the general "it won't save me any taxes, but I still want you out" attitude prescribed here. As Galbraith noted, the business community forced Nixon to freeze prices and wages in defiance of the conservative intellectuals, in accordance to the then-prevailing theories of inflation.

If you want a good political-macroeconomic description of the labour-capital contests of the era, the old American Keynesian account of each side blaming the other for inflation will do just fine.

# ? Feb 2, 2013 20:39

Wasse: Jan 16, 2010

The problem I would come back to - have the government intervene all they want - where does the money come from?

I'm far from an expert on the economy, especially after world war II. But my assumption here is the following situation existed:

1. Europe was... destroyed. In a literal sense. It's manufacturing capabilities, though varying by country, was largely crippled.

2. The US's manufacturing was soaring.

3. Cheap labor/out sourced manufacturing was not an issue yet.

From doing some quick looking, from 1945-1960 we had a huge trade surplus.

So - if government intervention could somehow bring about a return of a trade surplus - I could see the potential for a return to increasing prosperity. But I don't see that happening.

The one argument you I could see value on is an increase in government funding for R&D; with the possibility of that pushing us into the next age of something. But even then, that's a crap shoot. Not a guarantee.

# ? Feb 2, 2013 21:44

Typo: Aug 19, 2009

Wasse posted:

From doing some quick looking, from 1945-1960 we had a huge trade surplus.

So - if government intervention could somehow bring about a return of a trade surplus - I could see the potential for a return to increasing prosperity. But I don't see that happening.

Trade surplus doesn't necessarily work the way you are implying that it does.

I get the idea you are proposing is that the government could fund programs out of trade surpluses, but the money you gain through trade has to be able to purchase goods. Trade surplus implies a net positive amount of goods/services "leaving" your country by definition and hence in reality you are trading away real goods/services for pieces of paper or digitized number. And attempts to use the money to purchase goods and services (which has to be from the country you are acquiring currency from) will naturally reduce said trade surplus towards equilibrium. Not to mention of course, since your trade surplus is by definition someone else's deficit it is hardly a sustainable situation on the long run.

# ? Feb 2, 2013 21:59

Mr. Wynand: Nov 23, 2002; DLT 4EVA

Isn't this basically just Keynes but with a higher projected capacity for public debt?

Public works, high spending, high borrowing, high social services - your textbook welfare social democracy.

# ? Feb 3, 2013 04:49

Jacobin: Feb 1, 2013

Wasse posted:

I'm far from an expert on the economy, especially after world war II. But my assumption here is the following situation existed:

1. Europe was... destroyed. In a literal sense. It's manufacturing capabilities, though varying by country, was largely crippled.

2. The US's manufacturing was soaring.

3. Cheap labor/out sourced manufacturing was not an issue yet.

I think a few more can be added:

4. Despite plunge in wealth from the great depression the Earth's natural wealth still remained. Clean rivers, clean air, water, arable lands, natural resources of many kinds including metals. Not exactly this time around.

5. Climate change.

# ? Feb 3, 2013 05:37

dorquemada: Dec 22, 2001; Goddamn Textual Tyrannosaurus

Wasse posted:

3. Cheap labor/out sourced manufacturing was not an issue yet.

Automation was an issue, to an extent. It's been shelved for a while by globalization, but It's gotten to be a bigger issue, and it will get still bigger as it starts to get cheaper than the cheapest labor. Once robots start widely replacing no-benefits, minimum wage labor we'll have a big problem. And we're pretty close.

Un/under employment is going to have to be a fact of life outside of slumps, and the best solution would probably be consumption subsidies/guaranteed income, perhaps with an education requirement attached. Having displaced workers (inefficiently) do make-work public works projects seems like a waste of time and money without making anyone's life better.

# ? Feb 3, 2013 06:14

Radbot: Aug 12, 2009; Please remind me to get a job so I can stop spending all day posting in D&D about how I'm an unemployable failure

Why would educating those workers be helpful if there's a definite structural lack of jobs? Wouldn't you just increase competition among the few jobs that exist?

# ? Feb 3, 2013 06:31

Party Plane Jones: Jul 1, 2007; Flying the friendly skies in relative safet-oh god the engine fell off

Jacobin posted:

4. Despite plunge in wealth from the great depression the Earth's natural wealth still remained. Clean rivers, clean air, water, arable lands, natural resources of many kinds including metals. Not exactly this time around.

You're really underestimating the horrendous pollution that stemmed from late 1800s through the 1970s.

Party Plane Jones fucked around with this message at Feb 3, 2013 around 06:49

# ? Feb 3, 2013 06:46

Typo: Aug 19, 2009

dorquemada posted:

Automation was an issue, to an extent. It's been shelved for a while by globalization, but It's gotten to be a bigger issue, and it will get still bigger as it starts to get cheaper than the cheapest labor. Once robots start widely replacing no-benefits, minimum wage labor we'll have a big problem. And we're pretty close.

Most economist actually agree that automation and other skill biased technical change have being most responsible for the shift in employment patterns in the last 40 years as oppose to globalization. It's just that claiming the Chinese or the Indians are stealing your jobs sounds better than one which says IBM did so.

Typo fucked around with this message at Feb 3, 2013 around 06:57

# ? Feb 3, 2013 06:54

Typo: Aug 19, 2009

Radbot posted:

Why would educating those workers be helpful if there's a definite structural lack of jobs? Wouldn't you just increase competition among the few jobs that exist?

There isn't a structural lack of jobs, there is a structural lack of jobs for certain fields and low skilled labour, ultimately the economy of first world countries needs to transition to something other than one dependent on manufacturing providing jobs to the average joe and education is the only way of doing that short of simply accepting a higher degree of structural unemployment.

# ? Feb 3, 2013 06:57

computer parts: Nov 18, 2010; Pam you better not be making pornos!

Party Plane Jones posted:

You're really underestimating the horrendous pollution that stemmed from late 1800s through the 1970s.

Yeah, I mean at least for (eg) the Timber industry now they at least replant trees after they're done chopping them down.

# ? Feb 3, 2013 06:57

Peven Stan: Feb 1, 2006

Typo posted:

There isn't a structural lack of jobs, there is a structural lack of jobs for certain fields and low skilled labour, ultimately the economy of first world countries needs to transition to something other than one dependent on manufacturing providing jobs to the average joe and education is the only way of doing that short of simply accepting a higher degree of structural unemployment.

This is a pretty one sided view of structural reasons for mass unemployment. There's a fuckload of jobs, specifically in low skilled and backbreaking service sector/retail work (like cleaning motel rooms and taking care of old people in nursing homes). One of the reasons why private sector union membership is up for the first time since the 1980s is that enough people are locked in low wage, low skill jobs now that unions are starting to organize around those industries. SEIU didn't become a juggernaut overnight.

# ? Feb 3, 2013 07:07

Wasse: Jan 16, 2010

Typo posted:

There isn't a structural lack of jobs, there is a structural lack of jobs for certain fields and low skilled labour, ultimately the economy of first world countries needs to transition to something other than one dependent on manufacturing providing jobs to the average joe and education is the only way of doing that short of simply accepting a higher degree of structural unemployment.

That would lead me to a question though; if there is enough automation, do we get to a point, where there simply isn't enough work to do? And do you suddenly need to shift the thinking of a 8 hour, 5 day work week, to something shorter?

# ? Feb 3, 2013 07:52

eSports Chaebol: Feb 22, 2005; Support the International Campaign to Ban Spider Mines

Typo posted:

There isn't a structural lack of jobs, there is a structural lack of jobs for certain fields and low skilled labour, ultimately the economy of first world countries needs to transition to something other than one dependent on manufacturing providing jobs to the average joe and education is the only way of doing that short of simply accepting a higher degree of structural unemployment.

Having a glut of educated people isn't all that much better when you factor in the cost of education.

# ? Feb 3, 2013 08:34

dorquemada: Dec 22, 2001; Goddamn Textual Tyrannosaurus

eSports Chaebol posted:

Having a glut of educated people isn't all that much better when you factor in the cost of education.

Education of any sort (as long as it's predicated on reality and not, say, fantasy bullshit like homeopathy or crystal auras) has intrinsic value, which takes it out of the realm of make-work. Even if the skill you're learning is obsolete (Latin, Novell Network administration, etc) you're still honing your ability to learn.

# ? Feb 3, 2013 08:42

eSports Chaebol: Feb 22, 2005; Support the International Campaign to Ban Spider Mines

dorquemada posted:

Education of any sort (as long as it's predicated on reality and not, say, fantasy bullshit like homeopathy or crystal auras) has intrinsic value, which takes it out of the realm of make-work. Even if the skill you're learning is obsolete (Latin, Novell Network administration, etc) you're still honing your ability to learn.

Don't get me wrong: I'm all for more education. But educating people does not itself somehow produce an amount of skilled work commensurate with the amount of increased education or the increase in the number of educated people.

# ? Feb 3, 2013 09:10

shrike82: Jun 11, 2005; I HAVE NEVER CONTRIBUTED ANYTHING WORTHWHILE TO ANY DISCUSSION EVER. IF YOU ARE REPLYING TO ME YOU ARE WASTING EVEN AS PALTRY A RESOURCE AS INTERNET FORUM SPACE. PLEASE STOP ENGAGING ME FOR THE LOVE OF GOD, I'VE BEEN DOING THIS GIMMICK FOR YEARS.

dorquemada posted:

Education of any sort (as long as it's predicated on reality and not, say, fantasy bullshit like homeopathy or crystal auras) has intrinsic value, which takes it out of the realm of make-work. Even if the skill you're learning is obsolete (Latin, Novell Network administration, etc) you're still honing your ability to learn.

You're conflating "education" with "schooling".
I don't see why we should assume a degree equals education these days especially with all the lovely for-profit colleges out there e.g. UPhoenix.

Not to mention the entire CBA that comes into play when a degree potentially costs 6-figures. I don't think it's sufficient to say that it's worth it because the student learnt how to learn.

# ? Feb 3, 2013 11:34

Radbot: Aug 12, 2009; Please remind me to get a job so I can stop spending all day posting in D&D about how I'm an unemployable failure

Typo posted:

There isn't a structural lack of jobs, there is a structural lack of jobs for certain fields and low skilled labour, ultimately the economy of first world countries needs to transition to something other than one dependent on manufacturing providing jobs to the average joe and education is the only way of doing that short of simply accepting a higher degree of structural unemployment.

Uh, there aren't a whole lot of manufacturing jobs in the US anymore, so we're ahead of you on that one.

Care to explain why educating people is the answer to employing people? Seriously, that's a HUGE allegation, please support your argument. Where will they be employed, to start? Are you not aware of the millions of underemployed or unemployed college grads out there right now in the US and Europe? Who will pay for the education (careful, your answer should be at least mildly politically feasible)?

And what of the jobs that need to be done regardless, like janitorial work? Just gently caress everybody unless they're an engineer (who have magically not become over supplied or subject to labor-reducing technology)?

Lastly, let's remember that there IS a definite lack of jobs. There are still far more applicants than available openings in the US, according to the BLS.

Radbot fucked around with this message at Feb 3, 2013 around 16:25

# ? Feb 3, 2013 16:04

Typo: Aug 19, 2009

eSports Chaebol posted:

Having a glut of educated people isn't all that much better when you factor in the cost of education.

Yes, but the degree glut is the result of too many people taking on degree which are not very productive or in demand (i.e liberal arts), which ultimately might be because too many people sees university as career training rather than just an education.

The solution is to encourage people more people to go to vocational/technical colleges, or to learn a trade, which are both cheaper and more employable.

Peven Stan posted:

This is a pretty one sided view of structural reasons for mass unemployment. There's a fuckload of jobs, specifically in low skilled and backbreaking service sector/retail work (like cleaning motel rooms and taking care of old people in nursing homes). One of the reasons why private sector union membership is up for the first time since the 1980s is that enough people are locked in low wage, low skill jobs now that unions are starting to organize around those industries. SEIU didn't become a juggernaut overnight.

There are still a fuckload of jobs for low skilled labour in the service sector, but I think it's pretty undeniable that the demand for low skilled labour (as indicated by the number of jobs available) has dropped from its peak relative to the population and they are not coming back.

Radbot posted:

Uh, there aren't a whole lot of manufacturing jobs in the US anymore, so we're ahead of you on that one.

Care to explain why educating people is the answer to employing people? Seriously, that's a HUGE allegation, please support your argument. Where will they be employed, to start? Are you not aware of the millions of underemployed or unemployed college grads out there right now in the US and Europe? Who will pay for the education (careful, your answer should be at least mildly politically feasible)?

If you are discussing the -current- pattern of education and degrees in the US/Europe, I would agree with you that it's seriously broken because people are going to universities to get degrees that were never meant for career training for career training. You have enormous number of people flooding into the humanities or the soft sciences and expecting to get careers out of it when those fields were never meant to give you careers.

However, the ultimate reason why American workers get paid more than his/her Indian and Chinese counterpart has to do with the fact that they are more productive and education is one of the best improver of productivity (see Germany for a country which actually does do education well). Insofar you believe productivity is vital in determining employment and the long-term solution being transitioning towards new fields than education is absolutely necessary.

quote:

And what of the jobs that need to be done regardless, like janitorial work? Just gently caress everybody unless they're an engineer (who have magically not become over supplied or subject to labor-reducing technology)?

What about those, I thought the problem is the lack of jobs and not the lack of labour?

quote:

Lastly, let's remember that there IS a definite lack of jobs. There are still far more applicants than available openings in the US, according to the BLS.

I think the assumption that everyone is making is that there are a finite number of jobs available forever.

The truth is that starting with Marx people have being predicting a jobless society in which the rate of employment and wages falls permanently and yet that has not occurred at any point over the last 160 years despite enormous technological advancements. The response to automation and capital intensive production the -last- time around which resulted the drop in the demand for labour in agriculture and manufacturing has being the creation of the service industry. And for all the flaws in that everyone is still quite a bit wealthier than they were in 1900. The economy managed a grand transition which probably would have seemed implausible in 1900 yet it occurred anyway without a permanent reduction in employment.

The reason why people have jobs to (purportedly anyway) create value for society, there is no finite amount of demand for goods and services, there are probably finite demand for certain good/services.

Typo fucked around with this message at Feb 3, 2013 around 18:51

# ? Feb 3, 2013 17:43

icantfindaname: Jul 1, 2008

Wasse posted:

1. Europe was... destroyed. In a literal sense. It's manufacturing capabilities, though varying by country, was largely crippled.

People have talked about the other stuff, but I'd like to address this one. Every country within Europe that adopted social democratic economics had a postwar economic boom along with close to full employment, even the ones destroyed by the war. The idea that post WW2 economic growth was solely at Europe'e expense doesn't really hold.

See:
http://en.wikipedia.org/wiki/Post%E...nomic_expansion

http://en.wikipedia.org/wiki/Wirtschaftswunder

http://en.wikipedia.org/wiki/Trente_Glorieuses

http://en.wikipedia.org/wiki/Japane...conomic_miracle

Germany, France, Japan, and the UK aren't really what I'd consider the 'victors' of WW2, and they all had booms comparable to that of the US

# ? Feb 3, 2013 18:01

Radbot: Aug 12, 2009; Please remind me to get a job so I can stop spending all day posting in D&D about how I'm an unemployable failure

Typo posted:

Yes, but the degree glut is the result of too many people taking on degree which are not very productive (i.e liberal arts), which ultimately might be because too many people sees university as career training rather than just an education.

The solution is to encourage people more people to go to vocational/technical colleges, which are both cheaper and more employable.

Ah, the STEM argument. AGAIN.

I have a worthless, idiotic, non-STEM degree in economics, so I'm no genius, but with luck I'll be able to understand your (hopefully forthcoming) explanation of why having more engineers or biologists would somehow lead to more jobs being created for them, especially considering that other countries are able to provide a similar level of education for far cheaper at both an individual and aggregate level.

After that, we can talk about why half of my biologist/biomedical engineer fellow grads from UC San Diego still aren't employed in their fields four years after the fact despite getting great grades and going to one of the most well-known schools in their field.

Lastly, we can talk about *exactly* what sort of vocational training you're talking about, because then we can look at BLS data regarding average starting wage, growth expectations, and amount of applicants per open position for that industry.

Radbot fucked around with this message at Feb 3, 2013 around 18:07

# ? Feb 3, 2013 18:04

anonumos: Jul 14, 2005; Fuck it.

Radbot posted:

Uh, there aren't a whole lot of manufacturing jobs in the US anymore, so we're ahead of you on that one.

Care to explain why educating people is the answer to employing people? Seriously, that's a HUGE allegation, please support your argument. Where will they be employed, to start? Are you not aware of the millions of underemployed or unemployed college grads out there right now in the US and Europe? Who will pay for the education (careful, your answer should be at least mildly politically feasible)?

And what of the jobs that need to be done regardless, like janitorial work? Just gently caress everybody unless they're an engineer (who have magically not become over supplied or subject to labor-reducing technology)?

Lastly, let's remember that there IS a definite lack of jobs. There are still far more applicants than available openings in the US, according to the BLS.

The big trick is to educate "the masses" while not burdening them with "individualized risk" that would prevent them from finding a niche for themselves in an automated world. You could argue that there will be ongoing innovation in both automation itself and in good old fashioned service industries. When the majority of our labor is accomplished by robots, our only hope is to make it so that people to work at whatever they enjoy, identify new niches and innovation, and still not be "busted out" when an unfortunate accident come along.

Thinking back to the industrial revolution, while the cotton gin destroyed hand labor, other advancements led to new industries. The printing press spawned a huge journalism industry, creating new need for investigators, reporters, editors, machinists, ink manufacturing, and all the innovation involved in making the press a better tool.

When we talk about automation, it comes down to making people secure and able to perceive the need for a new niche. That is capitalism in a nutshell, but is something that modern capitalism does not actually accomplish, largely because of the way it's run. Workers assume all liability for injury or illness. Costs continue to rise far faster than incomes, even when income is still possible "post automation".

The most ideal solutions are politically unattainable. People with wealth continue to pound the "lower costs" drum, while nobody talks about making things more affordable for anyone but the wealthy.

PS: I got a hated "liberal arts" degree. I think a general education is vital to any graduate. With a solid backing in every area of human experience, you can be flexible enough to go into any career. It's a matter of activating a student's brain rather than just cramming in "knowledge". These argument against a Liberal Arts education are nonsense, and the solution is not "trade school for everyone". Trade schools should remain a good alternative, but I feel Liberal Arts+trade school would be better for some people. Liberal Arts is just the beginning of an education.

The rest you get in your actual career, which I was told I would change every 10 years anyway. So what good is training in one trade when you're likely to be forced to join another trade at some point in your life?

anonumos fucked around with this message at Feb 3, 2013 around 18:33

# ? Feb 3, 2013 18:27

Smerdyakov: Jul 8, 2008

Radbot posted:

Ah, the STEM argument. AGAIN.

I have a worthless, idiotic, non-STEM degree in economics, so I'm no genius, but with luck I'll be able to understand your (hopefully forthcoming) explanation of why having more engineers or biologists would somehow lead to more jobs being created for them, especially considering that other countries are able to provide a similar level of education for far cheaper at both an individual and aggregate level.

After that, we can talk about why half of my biologist/biomedical engineer fellow grads from UC San Diego still aren't employed in their fields four years after the fact despite getting great grades and going to one of the most well-known schools in their field.

Lastly, we can talk about *exactly* what sort of vocational training you're talking about, because then we can look at BLS data regarding average starting wage, growth expectations, and amount of applicants per open position for that industry.

High five, worthless econ degree buddy! The only person who has advocated the STEM position honestly and coherently is Pat Buchanan, who argues that we need to have protectionism for both capital industry and our workforce, which would be achieved by backing out of free trade agreements or otherwise dragging our feet on them (sort of like how Japan did) and severely restricting immigration of everyone including skilled workers. I know with an absolute certainty that you can hire highly qualified Indian nurses, Ukrainian computer programmers and Polish civil engineers for 20-50% below the standard US wage for those jobs, and if you outsource the sky is really the limit for how cheap it gets. I worked with a Ukrainian IT company and all the programmers made 800 bucks a month and were happy as hell.

But in my experience, people who advocate this generic social-democracy lite mixture are almost as dogmatic as their neoliberal opponents and rarely go beyond platitudes. Their primary belief is that there are no problems or tradeoffs and that an evil "them" is the only thing keeping the US from being Norway. There definitely is an evil "them" but it's not as though their removal from the political process will solve all economic problems, or even any of the largest economic problems. That would require a much more radical transformation of the social and material basis of our society that I'm not necessarily against, but I'd like to start the conversation where it actually starts.

Smerdyakov fucked around with this message at Feb 3, 2013 around 18:50

# ? Feb 3, 2013 18:48

Typo: Aug 19, 2009

Radbot posted:

Ah, the STEM argument. AGAIN.

I have a worthless, idiotic, non-STEM degree in economics, so I'm no genius, but with luck I'll be able to understand your (hopefully forthcoming) explanation of why having more engineers or biologists would somehow lead to more jobs being created for them, especially considering that other countries are able to provide a similar level of education for far cheaper at both an individual and aggregate level.

The simple answer is that they don't, China and India both have education systems, at the post-secondary level, which are far inferior the that of the western world, which might explain why the Chinese elite send their kids to foreign schools and why effective human capital in China is so low despite nominally high education levels. From an ancedentol perspective every single exchange student from China I've talked to agree that with the exception of the absolutely top-tier Chinese schools (Beida, Qinghua are fantastic schools), Chinese universities/colleges are pretty worthless.

How is it going to create more jobs? If there are demands for the services of STEM (and the wage level for most of those suggests so), then people graduated from those fields would be able to found their own firms and hire people.

quote:

After that, we can talk about why half of my biologist/biomedical engineer fellow grads from UC San Diego still aren't employed in their fields four years after the fact despite getting great grades and going to one of the most well-known schools in their field.

Yeah, the soft-sciences kinda suck for careers, but some stats instead of ancedentol evidence might be nice.

quote:

Lastly, we can talk about *exactly* what sort of vocational training you're talking about, because then we can look at BLS data regarding average starting wage, growth expectations, and amount of applicants per open position for that industry.

Those figures are going to be highly reliant on the current demand for the current quality of labour in those fields. Improving the quality of labour through better education fundamentally alters all those figures. But:

http://www1.salary.com/Electrician-III-Salary.html

Electricians for instance earn ~$50,000 on the average which is not too shabby at all.

quote:

I have a worthless, idiotic, non-STEM degree in economics,

A B.A or M.A? out of curiosity.

Also I edited my previous post to answer some more of your questions please read it!

Typo fucked around with this message at Feb 3, 2013 around 19:00

# ? Feb 3, 2013 18:49

shrike82: Jun 11, 2005; I HAVE NEVER CONTRIBUTED ANYTHING WORTHWHILE TO ANY DISCUSSION EVER. IF YOU ARE REPLYING TO ME YOU ARE WASTING EVEN AS PALTRY A RESOURCE AS INTERNET FORUM SPACE. PLEASE STOP ENGAGING ME FOR THE LOVE OF GOD, I'VE BEEN DOING THIS GIMMICK FOR YEARS.

For a thread titled "political aspects of full employment", it's kinda hilarious that the essay starts with the assumption the government is willing to pump prime the economy.
Based on what's happened over the past 4-5 years, I fully expect the tenor of political discourse in the US to be how we can further cut government spending.

# ? Feb 3, 2013 18:54

Paul MaudDib: May 2, 2006

shrike82 posted:

For a thread titled "political aspects of full employment", it's kinda hilarious that the essay starts with the assumption the government is willing to pump prime the economy.
Based on what's happened over the past 4-5 years, I fully expect the tenor of political discourse in the US to be how we can further cut government spending.

This unwillingness to prime the pump is the major obstacle to a workable immigration policy. Demand is not a fixed quantity, but that doesn't make it unlimited given financial and political limits. Priming the goddamn pump and getting the economy back on track would virtually fix the long-run deficit and would allow the economy to absorb our un/underemployed and some immigration.

# ? Feb 3, 2013 18:59

Smerdyakov: Jul 8, 2008

Typo posted:

The simple answer is that they don't, China and India both have education systems, at the post-secondary level, which are far inferior the that of the western world, which might explain why the Chinese elite send their kids to foreign schools and why effective human capital in China is so low despite nominally high education levels. From an ancedentol perspective every single exchange student from China I've talked to agree that with the exception of the absolutely top-tier Chinese schools (Beida, Qinghua are fantastic schools), Chinese universities/colleges are pretty worthless.

So your basic argument is the same one that was made in the US in the 1980s that hinges on the racist assumption that foreigners will be the "hands" that do "dumb" manual labor while the US will be the "brain" that does all the "idea work" and that these things won't change.
India, China, and Russia all, on an empirical basis, have computer programmers that are as good if not better than their American and western European counterparts and they're available for 10-25% of the cost. The idea that the west has some magical formula that can't be copied by others was a staple of european imperialism, and I really thought this thesis was safely falsified sometime around 1905, but apparently it's still alive and well!

And yes, US and European schools have much more prestige than others and they're also the only places with comprehensive liberal arts programs (though Argentina and Chile are coming up, for serious). The elite are likely to want to send their kids to the best schools in order to rub shoulders with American and European elites, but if you're talking about engineering or medicine, there are world-class schools in many, many countries and any differences between them and a US educated version are easily offset by the massive cost savings, both initially and long-term.

# ? Feb 3, 2013 19:00

shrike82: Jun 11, 2005; I HAVE NEVER CONTRIBUTED ANYTHING WORTHWHILE TO ANY DISCUSSION EVER. IF YOU ARE REPLYING TO ME YOU ARE WASTING EVEN AS PALTRY A RESOURCE AS INTERNET FORUM SPACE. PLEASE STOP ENGAGING ME FOR THE LOVE OF GOD, I'VE BEEN DOING THIS GIMMICK FOR YEARS.

Smerdyakov posted:

India, China, and Russia all, on an empirical basis, have computer programmers that are as good if not better than their American and western European counterparts and they're available for 10-25% of the cost.

I'd like to see this empirical basis you speak off.
I just have to look at all the failed outsourcing projects to see that offshore Indian programmers have been absolutely terrible compared to local developers.

# ? Feb 3, 2013 19:03

anonumos: Jul 14, 2005; Fuck it.

shrike82 posted:

I'd like to see this empirical basis you speak off.
I just have to look at all the failed outsourcing projects to see that offshore Indian programmers have been absolutely terrible compared to local developers.

My company offshored its automated regression testing and a good portion of 2-3 release versions of our software. That was 8 years ago. We're still cleaning up the code. Most of them just copied and pasted without editing comments or documentation. I see a lot of hosed up variables used just to mask where the data really came from (if that wasn't intentional, it was the actual effect).

Offshored programming sucks for the most part.

# ? Feb 3, 2013 19:07

Lexicon: Jul 29, 2003; 2 + 2 != 5

shrike82 posted:

I'd like to see this empirical basis you speak off.
I just have to look at all the failed outsourcing projects to see that offshore Indian programmers have been absolutely terrible compared to local developers.

Yeah, if anything, the trend nowadays is the reversal of offshoring programming.

# ? Feb 3, 2013 19:10

shrike82: Jun 11, 2005; I HAVE NEVER CONTRIBUTED ANYTHING WORTHWHILE TO ANY DISCUSSION EVER. IF YOU ARE REPLYING TO ME YOU ARE WASTING EVEN AS PALTRY A RESOURCE AS INTERNET FORUM SPACE. PLEASE STOP ENGAGING ME FOR THE LOVE OF GOD, I'VE BEEN DOING THIS GIMMICK FOR YEARS.

Yup, I didn't realize it was Imperialist for me to believe that US universities are significantly better than most Indian and Chinese ones.

# ? Feb 3, 2013 19:12

Typo: Aug 19, 2009

quote:

So your basic argument is the same one that was made in the US in the 1980s that hinges on the racist assumption that foreigners will be the "hands" that do "dumb" manual labor while the US will be the "brain" that does all the "idea work" and that these things won't change.

quote:

The idea that the west has some magical formula that can't be copied by others was a staple of european imperialism, and I really thought this thesis was safely falsified sometime around 1905, but apparently it's still alive and well!

oh good, we are already at the part of the D&D thread where the kneejerk "u racist" thing gets yelled out in an attempt at winning an argument in response to any and all bad thing said about a non-first world country.

I mean, I guess you could run with this, but I'm probably going to ignore it because it's really just name-calling.

Smerdyakov posted:

India, China, and Russia all, on an empirical basis, have computer programmers that are as good if not better than their American and western European counterparts and they're available for 10-25% of the cost.

I simply disagree with this. Because both my personal experience in IT, and the employment patterns for programmers in India/China for the most part indicates to me otherwise. If it is really a case that Indian and Chinese programmers on the average were every bit as good as ones in America there wouldn't be this many American computer programmers making far more than Indian programmers do. And many Indians seem to agree with this.

http://www.mumbaimirror.com/article...an-Indians.html

quote:

A comparison of revenue contribution by employees of top five players in India and the US in this space shows that an American IT professional contributes nearly ten times higher to the company�s turnover than his Indian counterpart.

Among the top five Indian IT firms � TCS, Infosys, Wipro, Satyam Computer and HCL Tech � TCS is the biggest in terms of annual revenue, but Azim Premji-led Wipro steals the show in terms of revenue per employee. But even wipro�s per employee revenue of just over $51,000 gets dwarfed when compared to the fortune 500-listed it companies in the us, where an employee contributes at least $1,00,000 to the company�s annual turnover.

Don't get me wrong, this isn't likely to be permanent and this might every well change in the next 2-3 generations because the economies of India and China are still emerging, but I don't feel qualified to predict that far into the future.

quote:

And yes, US and European schools have much more prestige than others and they're also the only places with comprehensive liberal arts programs (though Argentina and Chile are coming up, for serious). The elite are likely to want to send their kids to the best schools in order to rub shoulders with American and European elites,

It's not just prestige, the prestige is there for a reason, Chinese/Indian schools have a tendency at either stressing rote memorization or simply have students do jackshit at the post-secondary level because their education systems are immature and they haven't really figured out how to run it effectively.

quote:

but if you're talking about engineering or medicine, there are world-class schools in many, many countries and any differences between them and a US educated version are easily offset by the massive cost savings, both initially and long-term.

Yes, I explicitly mentioned that there are good schools in India/China too, but it's the average I'm talking about.

Typo fucked around with this message at Feb 3, 2013 around 19:16

# ? Feb 3, 2013 19:13

Smerdyakov: Jul 8, 2008

shrike82 posted:

Yup, I didn't realize it was Imperialist for me to believe that US universities are significantly better than most Indian and Chinese ones.

I will defer to your custom title that some thoughtful person bought for you. Also, no unkind words for Moscow State University?

Typo posted:

Don't get me wrong, this isn't likely to be permanent and this might every well change in the next 2-3 generations because the economies of India and China are still emerging, but I don't feel qualified to predict that far into the future.

It's not just prestige, the prestige is there for a reason, Chinese/Indian schools have a tendency at either stressing rote memorization or simply have students do jackshit at the post-secondary level because their education systems are immature and they haven't really figured out how to run it effectively.

Even taking this characterization as totally accurate, It's not likely to be "2-3 generations" is my point, which means that assuming we have 50-100 years of continued educational and technical dominance is false, or at the very least, baseless.

Japan and Taiwan both went from producing largely derivative, low-quality stuff and having their technical skills talked down to being the industry standard for quality in less than 35 years. India and China are at least halfway through this process, so I'd say assuming more than 10-15 years of the current dynamic is going to be way off base. But again, that' my opinion informed by historical examples and we may just have to agree to disagree if you have a different experience.

Whereas Russians (who you are omitting because...I don't know? ) ran a highly industrialized (yet very inefficient) society for a long time and their primary problems were not technical inability but political restraints. And they're pretty good and work pretty cheaply--you might be surprised how many of your favorite video games and applications have been made by Russian programmers.

My point is not that you're "racist" but that you're using an argument that implicitly hinges on certain assumptions about race and culture that have been proven untrue in the past and are likely to continue being proven untrue. If you don't understand my point, I'd be happy to clarify it for you further.

Smerdyakov fucked around with this message at Feb 3, 2013 around 19:32

# ? Feb 3, 2013 19:29

CharlestheHammer: Jun 26, 2011; If only the ~~niggers~~overly excitable young men could celebrate like good young ~~white men~~Tebow.

shrike82 posted:

Yup, I didn't realize it was Imperialist for me to believe that US universities are significantly better than most Indian and Chinese ones.

You aren't actually backing it up and seem to be basing it off your gut so yeah a bit. Hell you could even be right and it wouldn't change a thing.

# ? Feb 3, 2013 19:30

Typo: Aug 19, 2009

Smerdyakov posted:

Even taking this characterization as totally accurate, It's not likely to be "2-3 generations" is my point, which means that assuming we have 50-100 years of continued educational and technical dominance is false, or at the very least, baseless.

quote:

Japan and Taiwan both went from producing largely derivative, low-quality stuff and having their technical skills talked down to being the industry standard for quality in less than 35 years. India and China are at least halfway through this process, so I'd say assuming more than 10-15 years of the current dynamic is going to be way off base. But again, that' my opinion informed by historical examples and we may just have to agree to disagree if you have a different experience.

The difference between Japan and China is largely in the starting level of development was so different, in 1945 Japan, war damage notwithstanding, had an economy which was far more advanced than that of China's and India's and is able to proceed to US level's far faster.

You have to remember that Taiwan, South Korea, HK, and the rest of the Asian tigers are exceptions rather than the rule in developmental economics. -Very- few countries have achieved their level of success in transitioning towards high income status and implied professional service industries. IIRC something like 100+ non-western countries have entered middle-income by 1960-1970, yet the ones which broke through are around a dozen. Indicating that transitioning of itself is by no means a certainty let along the timing of it.

quote:

Whereas Russians (who you are omitting because...I don't know, you don't want to?) ran a highly industrialized (yet very inefficient) society for a long time and their primary problems were not technical inability but political restraints. And they're pretty good and work pretty cheaply--you might be surprised how many of your favorite video games and applications have been made by Russian programmers.

I didn't mention Russia because of my personal lack of experience with outsourcing IT work to Russia (while I've worked with both Indian and Chinese programmers before).

But I highly suspect for a variety of reasons, such as the fact I doubt Russian universities are as good as the ones in America despite being high quality relative to some other countries and the country's socio-political institutions causes diversion at the expense of productivity, that they aren't at the productivity level of American/European/Canadian programmers. I have no doubt though that there are many good Russian programmers and there are countless who are better than me personally though.

I also suspect that because they are more productive than other countries, their corresponding wages are also higher, which reduces incentive to outsource to them.

quote:

My point is not that you're "racist" but that you're using an argument that implicitly hinges on certain assumptions about race and culture that have been proven untrue in the past and are likely to continue being proven untrue. If you don't understand my point, I'd be happy to clarify it for you further.

Please don't, this is standard discourse which happens in half of D&D thread and is stupid as gently caress pretty much single time

Typo fucked around with this message at Feb 3, 2013 around 19:44

# ? Feb 3, 2013 19:39

CharlestheHammer: Jun 26, 2011; If only the ~~niggers~~overly excitable young men could celebrate like good young ~~white men~~Tebow.

You know just because you say its stupid doesn't make it so, right Typo? Especially if you are going to not put any effort into explaining why.

# ? Feb 3, 2013 19:48

dorquemada: Dec 22, 2001; Goddamn Textual Tyrannosaurus

anonumos posted:

My company offshored its automated regression testing and a good portion of 2-3 release versions of our software. That was 8 years ago. We're still cleaning up the code. Most of them just copied and pasted without editing comments or documentation. I see a lot of hosed up variables used just to mask where the data really came from (if that wasn't intentional, it was the actual effect).

Offshored programming sucks for the most part.

This is, believe it or not, more of a problem with our education system than developing-world educational systems. When management is incapable of accurately assessing the quality of the product (and the process that produces it), poo poo decision like this get made, and bad coding practices wind up getting rewarded.

It's also worth noting that the US system doesn't generally produce programmers that are productive right out of the gate. There's a lot of on the job learning and self-education that has to happen first. We'd get better results if we paid teachers/professors/instructors with significant professional experience wages comparable to what they'd get in industry.

Typo posted:

You have to remember that Taiwan, South Korea, HK, and the rest of the Asian tigers are exceptions rather than the rule in developmental economics.

Taiwan and HK were also beneficiaries of the brain drain that badly harmed China, both in the immediate postwar and the cultural revolution. Intellectuals fled DPRK to ROK in droves, as well.

dorquemada fucked around with this message at Feb 3, 2013 around 19:57

# ? Feb 3, 2013 19:53

KomradeX: Oct 29, 2011

How come every thread like this the huuur you should have gotten a STEM degree, argument turns up? Telling someone to be a STEM major is a personal judgment, not a societal one, since all you will end up with is a lot of out of work STEM majors.....sort like how it is right now.

But as for the political aspects of full employment, well it would be the death knell of capitalism, full employment is anathema to it. Since employed people not constantly on the brink of poverty are less likely to deal with the "dire need" of down sizing, or pay cuts. Let alone that starting in the late 70s and into the 80s the idea of acceptable unemployment came about. That not only is unemployment being too high bad, but it being too low is bad as well. Let's also not fool ourselves about retail jobs and other service sector jobs, which is where most employment gains are coming from over the last decade, is not only are they poo poo work but as anyone who's worked one knows well, poo poo pay. We can't have a functional society where many people, no matter if they're highschool dropouts, highschool grads, or college grads of various levels are only able to get jobs that provide below the poverty line existence.

# ? Feb 3, 2013 19:56

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# ? May 23, 2013 16:40

shrike82: Jun 11, 2005; I HAVE NEVER CONTRIBUTED ANYTHING WORTHWHILE TO ANY DISCUSSION EVER. IF YOU ARE REPLYING TO ME YOU ARE WASTING EVEN AS PALTRY A RESOURCE AS INTERNET FORUM SPACE. PLEASE STOP ENGAGING ME FOR THE LOVE OF GOD, I'VE BEEN DOING THIS GIMMICK FOR YEARS.

Typo posted:

I didn't mention Russia because of my personal lack of experience with outsourcing IT work to Russia (while I've worked with both Indian and Chinese programmers before).

But I highly suspect for a variety of reasons, such as the fact I doubt Russian universities are as good as the ones in America despite being high quality relative to some other countries and the country's socio-political institutions causes diversion at the expense of productivity, that they aren't at the productivity level of American/European/Canadian programmers. I have no doubt though that there are many good Russian programmers and there are countless who are better than me personally though.

Russia is a non-entity compared to China/India when it comes to offshore outsourcing and H1Bs within the US. They definitely don't have tech chop-shops like TCS etc.
Not sure why Smerdyakov keeps on harping on it - mentioning the premier national university is meaningless since the rest of the Russian university system is poo poo.

# ? Feb 3, 2013 20:01

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