What Price the Recovery.

While I expect that the weather will eventually become more summer-like, I am less confident about recovery from the current recession. According to Forrester Research Analyst John McCarthy, the total number of U.S. jobs moving offshore will reach 3.3 million by 2015. Of that number, about 472,632 will be computer-related jobs. Since jobs in that category have been well paid in the recent past, it's reasonable to suppose that the work of other highly paid and skilled groups will also be exported. Ads on the web include promises of offshore financial services, HR, payroll processing, and call centers. Accountancy and tax consultancy will probably be in scope soon - it's only a question of training. Any thing that can be done by telephone, email, on the web, or simply with the mail printing facility in the US, is up for grabs.

Meanwhile China is now said to be within a generation in terms of chip technology. Intel will try and sell us 64 bit processors, and convince us we need them in our desktops and laptops, but I'm not sure that in the current economic climate they will succeed. If we fail to do so, they won't have the money for expensive R&D, so they'll have no startling new products to leapfrog the competition. So by the time China can make chips equivalent to the Pentium 4, what price Silicon Valley. The same situation can be postulated for other manufacturing industries. Our houses as well as our cars will be arriving by ship in due course.

Russia is said by some experts to now be effectively controlled by criminal elements. These elements are intent on milking money out of the developed economies by any means available, since what was available in Russia has by now mostly been taken. Unlike more traditional criminal elements, they tend to have high levels of education and technology, and they are said to be indifferent to US prison sentences. Offshore business systems will no doubt get their attention soon if they haven't already. Large corporations in the US who outsource their software development can expect to have their profits siphoned off through trapdoors in the software they use to run their business. Individuals can expect to have their offshore-accessible private information exploited to their cost.

So can US workers realistically expect that there will ever be a return to the days when everyone with some kind of skill could get a job that was OK by US standards. I rather doubt it. And under those circumstances, will the large corporations who made their money by providing goods and services to these well paid workers be able to hold it together. I wonder about that too. There's a definite possibility that the US system based on capitalism, competition, and free trade could go down just as the Soviet style communist command economy went down. In fact one can argue on simple grounds that it must. The object of the game is for money to be concentrated in the hands of those who succeed at it. It follows that the rest of the population end up with none. Since the majority will then have no money to buy anything, production becomes pointless, and the system collapses.

I have to say therefore that I'm not optimistic about the prospects for the worlds largest economy in the 21st century. It seems to me that the world will soon be ripe for another major political upheaval of the kind characterized by the French Revolution of the 18th century, or the totalitarianism and communism of the 20th century. Totalitarianism is of course a likely field leader under circumstances when most of the worlds wealth is in the hands of a small proportion of its population.