Tuesday, March 01, 2011

Thatcher, Reagan & Mulroney - And Their Snake Oil

As a person ages it gets harder to believe.   With time the disconnect between belief and reality, between perception and fact, becomes inescapable, undeniable.  Some truths, usually value notions such as kindness and compassion and the like, weather the scrutiny of passing time better than other concepts, particularly the ideological sort.   You begin to do the unthinkable - you look down at the narrow, slippery ledge and realize how easy it is for all of us to lose our footing.

In my time we were sold the illusion of globalization.  We were conned into believing we could abandon those menial, manufacturing jobs and instead embrace the information age, the "knowledge economy" of the future.  We were no longer people of thermoses and lunch pails and steel toed boots.   Let the developing world have those chores.   We would be a society that extracted great wealth through processing and transmitting information.   This would be the line by which we maintained the divide between the new world and the old.

And who sold us this nonsense?   A big-haired ideologue, a rank opportunist and a borderline senile B-movie star.   Thatcher, Mulroney and Reagan.  Why did we believe them?   What were we thinking?  These three tore down vibrant, resilient societies and created a schism that perpetrated a massive transfer of wealth from the middle class to the ultra-rich.   The rich got oh so much richer by outsourcing all those once expensive manufacturing jobs to poor nations with low wages and lax regulations.   In their wake they left us with the promise of a glorious future in the knowledge economy.

Fair is fair.   We yielded our manufacturing sector.   We even dropped our trousers on trade and tariffs and surrendered our markets to ever less than fair competition.   And, having done that, having undone ourselves, we waited for our new legacy, the knowledge economy.  In the meantime we flipped burgers and kept busy selling each other those runners from Vietnam.

Today it's obvious that Thatcher, Mulroney and Reagan duped us on that knowledge economy business.  That too has been outsourced.  Most of us have had to deal with those technical service call centres where "Ashley" greets you with a heavy Mumbai accent.  Accounting firms use number crunchers oceans away to process tax returns.  My telephone company that earns its profits from me and my fellow Canadians outsources its tele-marketing campaign to South Asians.

Peter Wilby, former editor of The Independent and The New Statesman, writes in The Guardian, that, across the West, the middle class decline has only begun and tomorrow is not going to be a better day:

"  Knowledge work" , supposedly the west's salvation, is now being exported like manual work. A global mass market in unskilled labour is being quickly succeeded by a market in middle-class work, particularly for industries, such as electronics, in which so much hope of employment opportunities and high wages was invested. As supply increases, employers inevitably go to the cheapest source. A chip designer in India costs 10 times less than a US one. The neoliberals forgot to read (or re-read) Marx. "  As capital accumulates the situation of the worker, be his payment high or low, must grow worse."
We are familiar with the outsourcing of routine white-collar "  back office"   jobs such as data inputting. But now the middle office is going too. Analysing X-rays, drawing up legal contracts, processing tax returns, researching bank clients, and even designing industrial systems are examples of skilled jobs going offshore. Even teaching is not immune: last year a north London primary school hired mathematicians in India to provide one-to-one tutoring over the internet. Microsoft, Siemens, General Motors and Philips are among big firms that now do at least some of their research in China. The pace will quicken. The export of "  knowledge work"   requires only the transmission of electronic information, not factories and machinery. Alan Blinder, a former vice-chairman of the US Federal Reserve, has estimated that a quarter of all American service sector jobs could go overseas.

Wilby's comment is bleak but is worth a careful read.  It is still not too late to address this problem and find "made in Canada" responses.   Much as we moan about being "hewers of wood and drawers of water," that wood and that water is a buffer in a world increasingly short of both.   This may be a good moment to review how we keep our natural resources from going the same way as our manufacturing sector.

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