Whenever one gets caught they try to claim "bad apple". The same was true during the Dot Cont era. Yet magically no one went to jail or even had to pay back the money.
If you're going to be a thief in the United States, hell, white collar crime clearly pays.
H-1B, the Professional skills areas are calling the "outsourcing Visa". The reason is they use these Visas for training purposes and to move technology offshore. So, not only is it a labor issue, it is a R&D lost issue for the United States. We are now hemorrhaging lost R&D to cheaper labor offshore. That's the top tier jobs, $100k+ US jobs so that's not the way to go.
You don't want to enable the importation of cheaper labor into the United States because that displaces U.S. workers and erodes wages. The bottom line is labor arbitrage, wage arbitrage has to be stopped for many economists have pointed out, these practices are a race to the bottom and will eventually destroy the entire U.S. middle class.
As someone quite concerned about the impact of labor arbitrage on US wages, I can certainly see problems with immigration. Yet, if we have committed ourselves to virtually open our borders to both goods and services -- which we basically have, alas -- I might prefer that skilled programmers and other workers work in the US, rather than having US firms move their operations overseas, then shipping the goods and services here, which is the usual story. At least Americans get tax revenue and can provide personal services to the workers that way, and get some benefit from their entrepreneurship. The US still has one competitive advantage in this regard: many skilled people would like to move here. China does not yet have this (though it is starting to).
At minimum, if we must have H-1B and H-1A programs, priority might go to industries suffering intense competition from low-wage countries. Those industries might soon be wiped out in the US anyway, so they could have higher priority for immigrant workers to help compete.
For example, at present a large share of H-1A (unskilled) visas go to landscaping businesses. This looks to me purely a way to reduce US wages - landscaping businesses would still exist if they had to pay workers $30,000 per year. It would make more sense to give higher priority in H-1A visa quotas to, say, seafood processing, which has largely moved to Southeast Asia often in near-slave labor circumstances. If Indonesians are going to process shrimp anyway, they may as well do so here, which at least employs some Americans and provides taxes and adequate labor conditions.
I have not fully thought through all the implications of this, but there could be some political support for such a change if it were a good idea.
The difference is that the H1B worker can create more demand for housing, thus ensuring that young Americans can't get jobs OR afford homes. Outsourcing just makes sure of the former.
The problem with this topic is it always seems to degenerate into name calling. Hence, I request if one is going to write about immigration on EP that one:
1. stick to the statistics, facts and pure labor economics on it. This means absolutely no cultural issues or security issues and so forth.
2. cite well referenced experts. I've read a lot of studies coming out of the Center for Immigration Studies and frankly I see nothing wrong with most of their research methodology so as far as I'm concerned they are valid. Now "some" of the stuff on this topic, isn't appropriate for an economics related site.
3. Just plain be careful. This is a "hot" topic and a couple of things I don't want for EP. I do not want EP to turn into an "immigration" blog for one, we're "all things econ" but global labor issues, outsourcing, etc. is all part of that but not "the" issue. Secondly, I do not want any, absolutely any economic fiction, especially on this topic. Bottom line with immigration related topics is you are dealing with real live human beings so while labor supply/demand and immigration/global migration are assuredly intertwined, one needs to bear this fact into account.
As far as Dailykos goes, well, that's another blog. We're not Dailykos and we are not even partisan. Our goal here is to let the facts, the statistics, the reality come through and enable people of all political flavors to use their brain and start examining facts, details. We're reality based, not philosophy based, although I'm fairly certain the agenda behind many of us is to increase economic prosperity for the United States and especially for working America, working citizens of the United States.
Daily Kos can be difficult, because a lot of times criticism of the neo-liberal economics responsible laying behind H1b visas and the like gets you tagged as a racist. Which is utter bull, and is a desperate attempt to shut down the conversation. Most of them are unwitting accomplices. They simply don't understand that, as you say:
When labor markets are glutted by an alphabet soup of work visa programs and the costs of the necessaries of life are bid upwards by the tidal wave of immigration, the "banker class" are the most significant beneficiaries. The U.S. middle class and lower class are the losers in this zero-sum game.
And it's more than that, these firms are doing the H1b visa holders no benefit, because they are contributing to increased income inequality in the US that destroys the demand for their labor in the long run.
In a world economy built on mass consumption, the squeezing of wages through labor arbitrage is profitable for the individual, but disastrous for the world as a whole. It's to say the least, anti-social.
I honestly think that one thing that could be done to shut up the people who calling criticism of labor arbitrage racism, would be to provide information to Indian worker in the IT sector. India is a more or less free economy, and giving Indian IT professionals information about what the jobs they held paid when they were in the West, would strengthen the bargaining position of workers in India. And by raising wages there, increase demand for American products in India, and allow for actual competition, rather than labor arbitrage.
The question "That China has failed to provide enough of a communist safety net for the poor, is the cause of China's great savings rate?"
doesn't make sense. China's high savings rate is the result of: (1) there is hardly any social safety net for her people; (2) the Chinese has a high-savings culture throughout her 3000-years history.
The term 'corporatism' has changed in meaning over time and is increasingly being used to define the promotion of the interests of private corporations in government over the interests of the public. On that basis China can be considered a corporatist state as is the US as represented by the interests of the 'Industrial Military Complex' which seems to be promoted at the expense of the broader population.
It could be argued in a narrow sense that China is also 'fascist' state as individuals rights have been suspended to support the broader state objective of economic growth (at all costs?). What prevents China being defined explicitly as a fascist state is the absence of a Dictator although it is a single party state.
The decline to becoming a fascist state can be a subtle one - examine the 14 points and consider if the US is on that journey.
http://www.oldamericancentury.org/14pts.htm
I'm not American but one of the best books written about corporatist America was by C W Mills (written in the 50's but still holds today) called The Power Elite.
Or corrupt to a certain extent. Corruption by itself does not destroy a society, although it certainly doesn't help.
I think it's safe to say that as far as political scientists are concerned, the important distinction is between totalitarian regimes and nontotalitarian ones. In other words, does the state have complete control? In fascist states there is a remaining private sector, however they are vulnerable to arbitrary acts on the part of the totalitarian regime. In other words, there is absolutely no constraint on state action. One could argue that in a "regular" dictatorship, there are certain contraints that the dictator doesn't, or can't, cross.
It's possible that Bush and co. were heading toward something similar to fascism, without the totalitarian aspect -- but maybe they were.
The late economist Mancur Olson put forward the idea of "sclerosis", that is, that because of the greater ability of small elite groups to act collectively than large, mass groups, eventually the state becomes bogged down and gunked-up with relationships based on power, and it becomes very difficult to change anything. Thus, WWII wiped out the German and Japanese power structure, and they were able to be more innovative socially as a result.
There are plenty of examples in the US. The Defense Department is history's greatest political machine, and it regularly wastes hundreds of billions per year. The oil and coal industries fight back against renewable energy and efficiency, the car companies and highway lobby against transit, the real estate industry keeps the money flowing for suburban development (and financial meltdowns), the financial industry skews policy against domestic manufacturing, etc. etc. Short of getting involved in a world war and having democratic regimes conquer us and wiping away our power structure, we're in need of some pretty massive social movements to clear away some of the mess.
But concentrating on sclerosis, or some more poetic word, implies that there is nothing organized about this, it's just the workings of a powerful set of actors on a state. The Rove Republican party was trying to do something of an organized nature (1000 year republican reich? remember Rove wanted a permananet one party country), but the U.S. corporate elite don't have an organized view -- if anything, they have more of a "disaster capitalism" view that Naomi Klein asserts. They're more like vultures on a tree waiting for opportunities than cadres of disciplined party members (at least, outside of the Republican party).
So, I guess I'd have to argue that a truly totalitarian society requires a totalitarian political party -- big corporations are too disorganized. Big corporations, left to themselves, lead to sclerosis, they need a powerful political party to move to fascism.
It is indeed the antonym of socialism- but it's more than that. It's still somewhat centralized like socialism, in that the elites with the money, buy the game.
I'm still very much a distributist at heart myself- I like the idea of a "shipping tax" across the board, charged by distance, instead of tariffs or value-added taxes. But that can only come from a decentralized authority model- one where the highest law in the land is the neighborhood ordinance, and the lowest, the Constitution.
seebert, first I think your assessment of China being more of a fascist regime versus a "communist" one is spot on. Now as for "US Corporatism" may I suggest to you and the rest of the good folk a new term? How about Corruptism? As you noted, what we have here are private interest groups representing business concerns who are attempt to mold government policy to such a degree that it comes to the detriment of society. In order for their policy goals to be met, they attempt to do what most other lobbyist groups (i.e. environmental, civil rights, etc) let alone a normal citizen can do, and that is monster contributions of campaign war chests. That isn't to say that some groups, like say the labor unions, cannot donate in hopes to shape policy. But nothing matches the level of "financial influence" onto the lifeline of a politician's re-election like those from lobbyists representing companies.
Indeed what you have here, is an advanced form of corruption. And given how this is corruption on a political plane, what we have here is government by the financially pliable for the financially-capable. So how this differs from basic corruption is that we are going beyond donating to Congressmen X for hopes of landing a contract to the much bigger staging of policy to advance future goals beyond a single business application. In an odd way, it's an antonym of the term "socialism" in that one is for a public (or state) control of policy to the one in controlled through financial bribary for private business control of policy. So...how does everyone here feel about the term "Corruptism"?
What that debate really is about is what is the correct vision to impose on all of China, and eventually the world. It will never result in a truly free market, because the form of government is wrong.
I remember having the same discussion with a relative when this all started. The main point in return was that US Corporatism was different because there is no dictator, just an oligarchy of private corporations colluding to prevent competition with themselves. While that oligarchy DOES dominate our government and our economy, it does not have any means to keep somebody from marketing a new invention that doesn't fit the vision (unlike facism).
To me, what's going on in China isn't Corporatism, it's Fascism, as described by you below (control of the government over the corporations in an attempt to build the government's view of a perfect society. manfrommiddletown's proof that there is currently some debate in China of what that perfect society should look like is an aberration- the method remains the same).
What the left wing in the United States has been calling Corporatism is really just advanced corruption hiding in lobbyists and campaign contributions: the government is the slave of the international corporations, and it doesn't matter who you vote for because long before the election *all* candidates have already been bought out to pay for the campaign.
Which is what I was trying to say above. I don't see China's version of corporatism being primarily for individual profit, but rather for the ultimate shaping of a society (though new to me, preventing revolt with an expanding economy is certainly a good example of this, as is China Everbright, a corporation whose sole purpose is to invest in the west to pay communist-promised pensions to old people).
US Corporatism, on the other hand, is primarily for profit- instead of shaping society for the "common good" or the "perfect vision of the Fatherfigure", US Corporations pay lobbyists to change the law to reduce competition *solely* for additional profit. There is no "single world view" like in Facism.
I mentioned Krupp and Albert Speer. It should be noted that Alfried Krupp was initially an ardent supporter of the Nazis and pursued henious acts. What I wanted to point out was that as the war turned against Germany, fortunes reversing, Krupp was not able to back out because of Speer and the state. Gosh, I am going to have to find that book, because I know I'm leaving out stuff.
Whenever one gets caught they try to claim "bad apple". The same was true during the Dot Cont era. Yet magically no one went to jail or even had to pay back the money.
If you're going to be a thief in the United States, hell, white collar crime clearly pays.
H-1B, the Professional skills areas are calling the "outsourcing Visa". The reason is they use these Visas for training purposes and to move technology offshore. So, not only is it a labor issue, it is a R&D lost issue for the United States. We are now hemorrhaging lost R&D to cheaper labor offshore. That's the top tier jobs, $100k+ US jobs so that's not the way to go.
You don't want to enable the importation of cheaper labor into the United States because that displaces U.S. workers and erodes wages. The bottom line is labor arbitrage, wage arbitrage has to be stopped for many economists have pointed out, these practices are a race to the bottom and will eventually destroy the entire U.S. middle class.
As someone quite concerned about the impact of labor arbitrage on US wages, I can certainly see problems with immigration. Yet, if we have committed ourselves to virtually open our borders to both goods and services -- which we basically have, alas -- I might prefer that skilled programmers and other workers work in the US, rather than having US firms move their operations overseas, then shipping the goods and services here, which is the usual story. At least Americans get tax revenue and can provide personal services to the workers that way, and get some benefit from their entrepreneurship. The US still has one competitive advantage in this regard: many skilled people would like to move here. China does not yet have this (though it is starting to).
At minimum, if we must have H-1B and H-1A programs, priority might go to industries suffering intense competition from low-wage countries. Those industries might soon be wiped out in the US anyway, so they could have higher priority for immigrant workers to help compete.
For example, at present a large share of H-1A (unskilled) visas go to landscaping businesses. This looks to me purely a way to reduce US wages - landscaping businesses would still exist if they had to pay workers $30,000 per year. It would make more sense to give higher priority in H-1A visa quotas to, say, seafood processing, which has largely moved to Southeast Asia often in near-slave labor circumstances. If Indonesians are going to process shrimp anyway, they may as well do so here, which at least employs some Americans and provides taxes and adequate labor conditions.
I have not fully thought through all the implications of this, but there could be some political support for such a change if it were a good idea.
The difference is that the H1B worker can create more demand for housing, thus ensuring that young Americans can't get jobs OR afford homes. Outsourcing just makes sure of the former.
The problem with this topic is it always seems to degenerate into name calling. Hence, I request if one is going to write about immigration on EP that one:
1. stick to the statistics, facts and pure labor economics on it. This means absolutely no cultural issues or security issues and so forth.
2. cite well referenced experts. I've read a lot of studies coming out of the Center for Immigration Studies and frankly I see nothing wrong with most of their research methodology so as far as I'm concerned they are valid. Now "some" of the stuff on this topic, isn't appropriate for an economics related site.
3. Just plain be careful. This is a "hot" topic and a couple of things I don't want for EP. I do not want EP to turn into an "immigration" blog for one, we're "all things econ" but global labor issues, outsourcing, etc. is all part of that but not "the" issue. Secondly, I do not want any, absolutely any economic fiction, especially on this topic. Bottom line with immigration related topics is you are dealing with real live human beings so while labor supply/demand and immigration/global migration are assuredly intertwined, one needs to bear this fact into account.
As far as Dailykos goes, well, that's another blog. We're not Dailykos and we are not even partisan. Our goal here is to let the facts, the statistics, the reality come through and enable people of all political flavors to use their brain and start examining facts, details. We're reality based, not philosophy based, although I'm fairly certain the agenda behind many of us is to increase economic prosperity for the United States and especially for working America, working citizens of the United States.
Daily Kos can be difficult, because a lot of times criticism of the neo-liberal economics responsible laying behind H1b visas and the like gets you tagged as a racist. Which is utter bull, and is a desperate attempt to shut down the conversation. Most of them are unwitting accomplices. They simply don't understand that, as you say:
And it's more than that, these firms are doing the H1b visa holders no benefit, because they are contributing to increased income inequality in the US that destroys the demand for their labor in the long run.
In a world economy built on mass consumption, the squeezing of wages through labor arbitrage is profitable for the individual, but disastrous for the world as a whole. It's to say the least, anti-social.
I honestly think that one thing that could be done to shut up the people who calling criticism of labor arbitrage racism, would be to provide information to Indian worker in the IT sector. India is a more or less free economy, and giving Indian IT professionals information about what the jobs they held paid when they were in the West, would strengthen the bargaining position of workers in India. And by raising wages there, increase demand for American products in India, and allow for actual competition, rather than labor arbitrage.
Please fix your post!
1. No unformatted links, URLs in blog posts. Please correct!
2. Do NOT write a blog post that simply says go to another site and read your post. You can cross post here, that's fine but doing that is not ok!
EP is a true economics blog, community and if you're going to write on EP, it has to be well cited, referenced, formatted and complete piece.
Thanks!
The question "That China has failed to provide enough of a communist safety net for the poor, is the cause of China's great savings rate?"
doesn't make sense. China's high savings rate is the result of: (1) there is hardly any social safety net for her people; (2) the Chinese has a high-savings culture throughout her 3000-years history.
RLsoundpost
The term 'corporatism' has changed in meaning over time and is increasingly being used to define the promotion of the interests of private corporations in government over the interests of the public. On that basis China can be considered a corporatist state as is the US as represented by the interests of the 'Industrial Military Complex' which seems to be promoted at the expense of the broader population.
It could be argued in a narrow sense that China is also 'fascist' state as individuals rights have been suspended to support the broader state objective of economic growth (at all costs?). What prevents China being defined explicitly as a fascist state is the absence of a Dictator although it is a single party state.
The decline to becoming a fascist state can be a subtle one - examine the 14 points and consider if the US is on that journey.
http://www.oldamericancentury.org/14pts.htm
I'm not American but one of the best books written about corporatist America was by C W Mills (written in the 50's but still holds today) called The Power Elite.
Or corrupt to a certain extent. Corruption by itself does not destroy a society, although it certainly doesn't help.
I think it's safe to say that as far as political scientists are concerned, the important distinction is between totalitarian regimes and nontotalitarian ones. In other words, does the state have complete control? In fascist states there is a remaining private sector, however they are vulnerable to arbitrary acts on the part of the totalitarian regime. In other words, there is absolutely no constraint on state action. One could argue that in a "regular" dictatorship, there are certain contraints that the dictator doesn't, or can't, cross.
It's possible that Bush and co. were heading toward something similar to fascism, without the totalitarian aspect -- but maybe they were.
The late economist Mancur Olson put forward the idea of "sclerosis", that is, that because of the greater ability of small elite groups to act collectively than large, mass groups, eventually the state becomes bogged down and gunked-up with relationships based on power, and it becomes very difficult to change anything. Thus, WWII wiped out the German and Japanese power structure, and they were able to be more innovative socially as a result.
There are plenty of examples in the US. The Defense Department is history's greatest political machine, and it regularly wastes hundreds of billions per year. The oil and coal industries fight back against renewable energy and efficiency, the car companies and highway lobby against transit, the real estate industry keeps the money flowing for suburban development (and financial meltdowns), the financial industry skews policy against domestic manufacturing, etc. etc. Short of getting involved in a world war and having democratic regimes conquer us and wiping away our power structure, we're in need of some pretty massive social movements to clear away some of the mess.
But concentrating on sclerosis, or some more poetic word, implies that there is nothing organized about this, it's just the workings of a powerful set of actors on a state. The Rove Republican party was trying to do something of an organized nature (1000 year republican reich? remember Rove wanted a permananet one party country), but the U.S. corporate elite don't have an organized view -- if anything, they have more of a "disaster capitalism" view that Naomi Klein asserts. They're more like vultures on a tree waiting for opportunities than cadres of disciplined party members (at least, outside of the Republican party).
So, I guess I'd have to argue that a truly totalitarian society requires a totalitarian political party -- big corporations are too disorganized. Big corporations, left to themselves, lead to sclerosis, they need a powerful political party to move to fascism.
JR on Grist
It is indeed the antonym of socialism- but it's more than that. It's still somewhat centralized like socialism, in that the elites with the money, buy the game.
I'm still very much a distributist at heart myself- I like the idea of a "shipping tax" across the board, charged by distance, instead of tariffs or value-added taxes. But that can only come from a decentralized authority model- one where the highest law in the land is the neighborhood ordinance, and the lowest, the Constitution.
"Why Corporatism is actually a good thing."
In time.
I've got a load of things I need to do first.
Here is your classic blog post, title "What is Corporatism?"
I hope you write this!
seebert, first I think your assessment of China being more of a fascist regime versus a "communist" one is spot on. Now as for "US Corporatism" may I suggest to you and the rest of the good folk a new term? How about Corruptism? As you noted, what we have here are private interest groups representing business concerns who are attempt to mold government policy to such a degree that it comes to the detriment of society. In order for their policy goals to be met, they attempt to do what most other lobbyist groups (i.e. environmental, civil rights, etc) let alone a normal citizen can do, and that is monster contributions of campaign war chests. That isn't to say that some groups, like say the labor unions, cannot donate in hopes to shape policy. But nothing matches the level of "financial influence" onto the lifeline of a politician's re-election like those from lobbyists representing companies.
Indeed what you have here, is an advanced form of corruption. And given how this is corruption on a political plane, what we have here is government by the financially pliable for the financially-capable. So how this differs from basic corruption is that we are going beyond donating to Congressmen X for hopes of landing a contract to the much bigger staging of policy to advance future goals beyond a single business application. In an odd way, it's an antonym of the term "socialism" in that one is for a public (or state) control of policy to the one in controlled through financial bribary for private business control of policy. So...how does everyone here feel about the term "Corruptism"?
In both cases, I'm seeing a hostile takeover rather than a merger. But the direction is reversed:
Fascism is the hostile takeover of business by the government.
Corporatism as we see it in the last four decades in the United States, is the hostile takeover of government by business.
What that debate really is about is what is the correct vision to impose on all of China, and eventually the world. It will never result in a truly free market, because the form of government is wrong.
I remember having the same discussion with a relative when this all started. The main point in return was that US Corporatism was different because there is no dictator, just an oligarchy of private corporations colluding to prevent competition with themselves. While that oligarchy DOES dominate our government and our economy, it does not have any means to keep somebody from marketing a new invention that doesn't fit the vision (unlike facism).
What the real meaning of the word IS.
To me, what's going on in China isn't Corporatism, it's Fascism, as described by you below (control of the government over the corporations in an attempt to build the government's view of a perfect society. manfrommiddletown's proof that there is currently some debate in China of what that perfect society should look like is an aberration- the method remains the same).
What the left wing in the United States has been calling Corporatism is really just advanced corruption hiding in lobbyists and campaign contributions: the government is the slave of the international corporations, and it doesn't matter who you vote for because long before the election *all* candidates have already been bought out to pay for the campaign.
So what is Corporatism?
Which is what I was trying to say above. I don't see China's version of corporatism being primarily for individual profit, but rather for the ultimate shaping of a society (though new to me, preventing revolt with an expanding economy is certainly a good example of this, as is China Everbright, a corporation whose sole purpose is to invest in the west to pay communist-promised pensions to old people).
US Corporatism, on the other hand, is primarily for profit- instead of shaping society for the "common good" or the "perfect vision of the Fatherfigure", US Corporations pay lobbyists to change the law to reduce competition *solely* for additional profit. There is no "single world view" like in Facism.
I mentioned Krupp and Albert Speer. It should be noted that Alfried Krupp was initially an ardent supporter of the Nazis and pursued henious acts. What I wanted to point out was that as the war turned against Germany, fortunes reversing, Krupp was not able to back out because of Speer and the state. Gosh, I am going to have to find that book, because I know I'm leaving out stuff.
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