How the world becomes wealthier (was Re: Offshoring: San Jose Mercury News article)

["Richard G. Combs" <richard -dot- combs -at- voyanttech -dot- com>]

Before I finished replying to his first salvo, k k calmed down and revised
his remarks. But, here's my response to the first message anyway. My general
points apply equally to the lower-key second edition. ;-) So, initially, k k
wrote:

> Corporate newspeak at its finest. Offshoring makes us
> richer. So that makes it all better. It's OK for
> Americans to lose their houses and go two years and
> more without work because that somehow makes us
> richer. <snip>

Anyone who remains unemployed for *two years* is sitting around feeling
sorry for himself, cashing a government check, and waiting for someone to
hand him something. Sorry, no sympathy.

> I'll be hanged if I can figure how I'm richer
> because my neighbors who used to work at Dell are now
> working at Burger King. <snip>

At the Arby's I sometimes visit, there's a profile on the wall of a guy
named Amandji. He came to the US from Iran some time after the revolution.
IIRC, he was a professional (doctor or lawyer?) in Iran; in the US, he took
a counter job at Arby's just to be working. Today, he's a regional manager
in charge of a couple or three dozen locations. Judging by the cut of his
Italian suit, he's making as much money as a doctor or lawyer -- maybe more.
Anecdotal? Sure. But for every anecdote you can cite about a former tech
worker at Burger King, I can find an anecdote about someone who turned such
adversity into opportunity. Of course, they didn't sit on unemployment for
two years...

> But then I'm not an investor.
> I guess maybe you own a bunch of stock in companies
> that are offshoring a lot? <snip>

Just a retirement account with some mutual funds that are finally coming
back up. :-} And why *aren't* you an investor? If you were a tech writer in
the 90s, you certainly had plenty of discretionary income. ;-) Did you
prefer to spend it all and let someone else worry about your future?

> Your examples are spurious rot because those people
> were displaced by economic changes that CREATED

The current changes are also creating jobs, and future changes will as well.
You're fooled by the fact that some economic events are easily seen and
others are unseen. When Acme Corp. announces layoffs due to outsourcing, you
see the 1000 jobs that are "lost" -- it happens all at once and makes
headlines.

But you forget that Acme, due to the savings, is producing the same output
for $20 million less (its productivity has increased). Therefore, Acme now
has $20 million to use in other ways. That freed-up money is going to be
used for *something* -- new ventures, research, expansion,... (Even if it's
all distributed to shareholders, they'll consume or invest it -- very few
people put money under their mattress these days.)

That new, different spending and investment will create new, different jobs.
But, you don't notice because they're created a few at a time, spread here
and there, and thus there are no headlines. (Well, if you read the business
news, you may have noticed there was a net gain of 100,000-odd jobs last
month. But it doesn't have the same impact as the headline "More Acme
Layoffs.")

And, no, the replacement jobs won't be in the fast food industry. The $20
million will create jobs that are *more* productive, higher-valued, than the
ones being replaced -- that's how companies and individuals make themselves
wealthier, by finding better uses for their capital.

I think it was either Schumpeter or Hayek who called this process "creative
destruction." Any effort to stop it and freeze things as they are makes us
all poorer in the long run.

Richard


------
Richard G. Combs
Senior Technical Writer
Voyant Technologies, Inc.
richardDOTcombs AT voyanttechDOTcom
303-223-5111
------
rgcombs AT freeDASHmarketDOTnet
303-777-0436
------










^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

ROBOHELP FOR FRAMEMAKER TRIAL NOW AVAILABLE!

RoboHelp for FrameMaker is a NEW online publishing tool for FrameMaker that
lets you easily single-source content to online Help, intranet, and Web.  
The interface is designed for FrameMaker users, so there is little or no
learning curve and no macro language required! Call 800-718-4407 for 
competitive pricing or download a trial at: http://www.ehelp.com/techwr-l4

---
You are currently subscribed to techwr-l as:
archive -at- raycomm -dot- com
To unsubscribe send a blank email to leave-techwr-l-obscured -at- lists -dot- raycomm -dot- com
Send administrative questions to ejray -at- raycomm -dot- com -dot-  Visit
http://www.raycomm.com/techwhirl/ for more resources and info.