Don’t Get Mad About Outsourcing. It Is Capitalism At Its Finest.
FILED TO: Economics
For writers, thinkers and opinion makers in the West, the fall of the Berlin Wall in 1989 was the exclamation point that concluded all debate about the value of free-market Capitalism. Not only was this system of distributing resources efficient, it was also morally correct. It was to stand as the apex of human societal construction, a system that could never be bettered because it was built on truths inherent in human nature: greed, self-interest, competition and hierarchy. Following neoliberalism’s triumphalist proclamations of the ‘end of history,’ capitalism was elevated to the status of a ‘fact of life’ in the public consciousness, beyond the scope of mainstream debate. However, phenomenons that were symptomatic of the system, such as outsourcing , remain extremely unpopular. Outsourcing is something only ever discussed in negative tones but according to the rules of globalized capitalism to which we all adhere, it is makes perfect sense. Companies seek to gain a competitive advantage by directing capital to the areas with offer the greatest potential profit margin. This is the very essence of free-market capitalism.
You know outsourcing is in troubled times when it is causing problems between the U.S and U.K government, the special relationship that sits at the core of the neoliberal worldview. Last month The US government objected to their UK Ministry of Defence’s plan to outsource procurement of military equipment to the private sector. In this instance, the UK governments’ faith in the free-market ‘raised some concerns’ for their U.S counterparts as it could put ‘sensitive information that is shared between the two forces at risk’. The U.S sponsored structural adjustment programmes throughout the Global South rested on the inalienable truth free-markets were more efficient than the state. But when it comes to the security workings of its closet ally, the U.S government suddenly seems to lack faith in ‘the invisible hand’ to work its magic.
This same negative response to outsourcing followed one of the more amusing examples of the process that took place earlier this year. In January, an unnamed software developer was outsourcing his own work to a similarly qualified but less-costly developer from China. The mystery gentleman reportedly paid just a fifth of his six-figure salary to this worker based in Shenyang to do his job in his stead whilst he leisurely spent his workdays surfing the web, watching cat videos on YouTube and browsing Reddit and eBay. Credit where credit is due, he must have picked his replacements well as he received consistent excellent remarks for his codes which were “clean, well written and submitted in a timely fashion.” For quarter after quarter, his performance review noted him as the best developer in the building. It was only due to a routine security check, which flagged up that someone was repeatedly logging on to the company’s computer system from China, that the enterprising scheme of the developer in question was ever uncovered.
With the story came the expected avalanche of shock and disgust launched at this unnamed worker who could so callously shirk his responsibilities onto someone else. How could someone so readily exploit their position and geographical privilege to construct a life where they no longer have to make any efforts to be productive but can simply live of the surplus value they extract from the labour of someone less powerful? The problem with that view is that ignores the fact that this is the same method of producing wealth that lies at the heart of a capitalist framework. A traditional Marxist would say that the injustice inherent in capitalism is not that it leads to rampant inequality, or that it values goods on the basis of profit-margin as opposed to necessity. They would say that the injustice of capitalism is found in its method of creating profit, which a marxist would equate to theft- the profit for capitalist class comes from the value of the worker’s labour minus the amount that you pay the worker for that same labour. When looking at it from that perspective, the idea to outsourcing your job to a less-powerful equivalent of yourself makes perfect sense. The company that this developer was working for reportedly fired him after they made their discovery. What are the chances they tried to contact the Chinese developers shortly after giving the old guy his walking papers?
It was a story that seemed stranger than fiction at first but outsourcing is the inevitable result of mature capitalism, especially the globalized, empowered version of capitalism that emerged from the end of the Cold War, no longer required to temper its excesses by the need to appear more just than Communism. The Onion had no idea how prophetic they were being when the mocked outsourcing here in 2009:
While hopefully we will not reach the stage where the world’s poorest man is doing 83% of the world’s work, when critiquing manifestations such as outsourcing, we must be willing to look at the cause of the problem not just the symptom. Anger towards outsourcing comes from a feeling that capitalism is not being fair; its taking away my job which I am giving to someone else just because they are cheaper. But this should be expected. Free-market capitalism is not immoral but amoral, it does not determine its decisions in accordance with a moral compass. Questions of fairness simply don’t come into it.