Last spring I read a book by Tom Peters called Re-Imagine! where he asks his readers to think about business and their own jobs differently. In the book he is excited that in the near future, people will be hired on a temporary basis for their talents and what they can accomplish, not because of where they live or who they know. He "imagines" a world where traditional businesses are no longer relevant. His vision of business in the very near future is that of independent contractors coming together for a "project" and when the project is done, moving on to the next one.
He writes that businesses stockpiling people and using a "brick and mortar" approach is a thing of the past. He foresees a White-Collar apocalypse similar to the blue-collar apocalypse that happened in the 80's, when machines and technology eliminated a lot of redundant or inefficient "line jobs." He foresees the same thing happening to middle class, office staff of most companies and has many examples to show that he might be on to something.
Someone sent me an article (posted in the comments section) by Gary North, an investor, who has a similar view to that of Tom Peters. He sees the development of China and India as some of the causes for this inevitable cataclysm. He cites that 300,000 computer engineers graduate school every year within India. Not only is there an abundant supply, but they are willing to work for $400 a month. Bill Gates spoke to a graduating class of Indian professionals this week. Gary North mentions that Bill Gates doesn't speak much in public, and when he does, you know that he sees value in it. He sees the future.
To me, this perfectly illustrates the idea of the potential implementation of comparative advantage. The U.S. can no longer compete with software engineers from India, so why not use less resources to have an Indian national program software and take the money you save and invest it into a technology or specialization that we can then turn around and sell to India? With the new tech or specialty, you train the Americans who lost their jobs to the Indian. Free trade is a wonderful thing.
I have to confess that I am slightly worried about my own white-collar job, but I am also excited about the potential of a society where people are hired for their talent and the merit of their work is what they are worth. As Tom Peters would say, "You are a 'rock star' in the world of business. You can make deals, continue learning your trade, and sell your trade on a completely open market." Scary, yet exciting.
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Gary North's REALITY CHECK
garynorth@garynorth.com
November 18, 2005
SMITH, WONG, AND PATEL
Two and a half years ago, I wrote a report on the astounding fact of China's annual output of college graduates in science and technology: over 450,000. Since the publication of that report, another million graduates have entered the job market.
I offered specific recommendations in that report regarding self-defense: career strategies for those readers who are wise enough to read the handwriting on the wall. I won't review those recommendations here. I have posted that issue in the "Reality Check" archives.
http://snipurl.com/chinesegrads
This isn't the half of it. India this year is expected to graduate 300,000 engineers in computer science alone. Next year: the same.
http://snipurl.com/csengineersindia.
A conservative estimate is that India's total number of engineering and science graduates is close to China's.
BILL GATES' SPEECH
Almost three years ago, Bill Gates spoke at the India Institute of Technology. As he said in his introductory remarks, he has many offers to speak to colleges, and he
accepts few. He accepted this one. Why? Because he sees the future.
Just one example of that is the incredible revolution taking place in India where literally hundreds of thousands and in the future millions
of jobs will be created by taking the educational focus of the country and applying that computer science and high value service type activities and connecting up with the needs for those capabilities not only in India but around the world.
He then got to the heart of the matter for business. Borders are disappearing. Not only are borders
disappearing for business-consumer exchanges, they are disappearing for business-business exchanges.
The idea of being able to buy and sell between any two companies anyplace in the world, you know, that dream is a very interesting dream because it means that the opportunity for someone is more related to their talent, to their education than to where they're located. If somebody is very talented they can offer their services through the Internet with the help of software and digital approaches and be able to apply their talent to problems in different locations. And it's that kind of thinking that makes India a superpower of human talent rather than traditional resource extraction or other ways of measuring the potential of a country.
http://snipurl.com/iitgates
For productive, creative, and disciplined people, the threat of international commerce is not a threat; it's a liberation. It's getting an extra million engineers a year working on projects, any one or ten or 1,000 of which can improve your life. A good idea is not going to remain bottled up in China or India.
The collapse of Chinese Marxist socialist economy and the erosion of India's Fabian socialist economy have allowed the blooming of intelligent, disciplined, and now
technically educated people who would otherwise have spent their lives as bureaucrats or peasants.
Yet for the heretofore geographically sheltered engineers in the West, whose corporations promised them security and a retirement in leisure, these are disturbing changes. A computer software engineer in India makes $400 a month. For him, this is a lot of money. For an IT employee in California, it isn't.
CONSUMERS AND PRODUCERS
Americans want a good deal, just as everyone else does. We don't want to pay retail if we don't have to. Who does?
As producers, we fear foreign competition. As consumers, we love it. We are schizophrenic.
But this is also true of everyone else. This schizophrenia can be found in every country in every time period. The quest for a producer's monopoly is always the
quest to keep out competition. The quest to evade the local monopoly is also widespread.
Today, Smith and Wong are making deals with each other
every day. The emporium where the deals are made is symbolized by Wal-Mart's price-slashing yellow happy face with the Zorro mask. "Always low prices. Always." That
is Wong's offer, by way of Bentonville, Arkansas.
Now Patel is getting into the act. He has one enormous advantage over Wong. He speaks English. He has another: a national specialization in computer science,
meaning the Internet. If it's digits, he can use it. He can improve it. And he makes $400 a month.
Next year, he will make $500 a month.
China has an advantage over India: Confucianism. It is the ethical system of business. Confucius was the original Dale Carnegie. There is no caste system in China to keep the best and the brightest from moving up in terms
of productivity. Also, extremely important, there is a Western conception of time, meaning linear time, meaning the idea of progress. Marxism gave China that legacy --
Augustinianism as re-interpreted by Marx, Lenin, and Mao. Now Mao is gone, but the Western idea of progress remains.
India still labors under the burden of Hindu time, a cyclical illusion of temporal process in which only reincarnation allows an escape from time's illusion into
the trans-historical realm of non-individuality. This has
produced what is known as IST: Indian Standard Time, the English bureaucrat's equivalent of heaven.
INCREASED WEALTH, INCREASED RESENTMENT
There is no question that the overcoming of borders will increase the wealth of everyone. But it will decrease the comparative wealth of the West. The problem most people have is that they are fixated on comparative wealth, not the comfort that increasing wealth brings. As men become more comfortable physically, they chafe under the
improvement of others who are socially close to them. They
also chafe under perceived slights by those only one layer above them.
For decades, we paid no attention in the West to Wong and Patel. They were too far away and too far down the income-distribution curve. Rural residents -- most of the population -- paid little attention to us, for the reverse
reason: too much social, geographical, and economic difference.
As the gap closes, the tensions and resentment will increase. The man on the lower rung will think, "Who does he think he is, anyway?" The man on the rung above him will think, "He's getting uppity."
This is human nature. It takes great self-discipline to think, "Live and let live." In fact, there have been only two phrases to bring millions of people to "Live and
let live."
1. "Do unto others as you would have others do unto you."
2. "Let's make a deal."
Americans as individuals acknowledge that the first phrase is true, and they feel a little guilty when they break it. As for the second phrase, they are the grand
masters. So, on the whole, America has become the emporium of the world. This is why foreigners prefer to invest here.
But the steady decline of future-orientation among Americans has led to reduced thrift, reduced commitment to improved work performance, and a decline in the number of students going into science and engineering. Our
entrepreneurship is carrying us, but it cannot do it in the face of a cultural transformation of two huge societies at a time when cross-border trade is rising.
INCOME
How can an average American beat the average Asian worker? By getting access to more capital. Some of this capital is financial. Where will Americans get access to
it? For now, from abroad. That is what the $800 billion a year payments deficit is about: foreign investment here in exchange for trinkets. The problem is, Asian central banks and Asian investors may not see the benefit of investing in our abilities if we remain consumers more than producers.
The other capital is ethical. This is in a depleted supply and is growing worse. I have in mind future-orientation, self-reliance, and an unwillingness to compel others to support us through government coercion. Here, we are a different people from what our parents were in 1950, or their parents were in 1920.
Basically, it is this outlook: "The world owes me a living." This was the song of Disney's grasshopper. The ants had a different vision.
Few people have the luxury of resting on either their laurels or their oars. As producers, we are being nipped from behind by tens of millions of Asians, only newly arrived from the farm. They have moved from being literally hungry to psychologically hungry. They are
determined to get ahead.
They are becoming what Americans used to be.
Europeans didn't love us in 1900: "Uppity!" I don't think this has changed much. Who do they think they are, anyway?
You are well advised not to remain an average American. You had better start investing -- in yourself first, then the market. If you are not the best in your office, then you had better start upgrading. It's not that the guy in the next cubicle is gunning for your job. It's that 10,000 guys in Asia are gunning for your job. With the Internet what it is, 500 of them have a shot at it. They have this to say: "$400 a month." Those are powerful words.
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