William Hackos, Jr. PhD
Vice President, Comtech Services, Inc.
As information developers, we live in fear of having our jobs outsourced to India or China. Prosperity as we know it is coming to an end. As our salaries here drop to the levels of India or China, we wonder how we will be able to feed our children.
If all of this doom and gloom seems like a new phenomenon, you should read the recent essay by John Ralston Saul in the March issue of Harper’s Magazine, “The Collapse of Globalism.” Saul takes a broader historical look than we do. He points out that the stresses we are going through now have happened before. In the 1920s the robber barons, Rockefeller, Carnegie, Walker, J.P. Morgan, and others, were given free rein to pursue their corporate profit goals worldwide. With new forms of communication, the world was getting smaller. The measure of a country’s success was the success of its multinational corporations. Salaries were high, and nobody worried about the fact that these corporations were corrupt or that many people in this country did not share in this prosperity. Then in October 1929, prosperity ended and the Great Depression started. But for three or four years, our government did nothing. Corporate excesses continued. The same thing happened throughout the industrial world.
John Ralston Saul defines globalism as a regime in which multinational corporations are powerful, national governments are weak, and the success of a country is measured by its corporations’ profits and the growth of its financial markets. The role of government is to ensure the successes of its corporations throughout the world. Corporate excesses are ignored.
The reaction to the collapse of globalism in 1929 led directly to a rise of nationalism in which each government acted unilaterally to protect its own interests. In the 1930s we see the rise of Hitler, Stalin, Tojo, Mussolini, Tito, Franco, and more. The United States retracted from the global scene with an isolationist policy until forced into WWII by Pearl Harbor. Nationalism itself lead to extreme excesses, in particular the imperialism of Japan, Russia, and Germany. Eventually this intense nationalism led to World War II and a collapse of world nationalism. The United Nations, NATO, and the rebuilding of Europe and Japan started a new phase of globalism.
If all of this seems a little familiar, it should. It has been repeated with the rise of multinational companies and the weakening of governments that peaked in the Clinton administration, followed by the dot.com crash in 2000, nationalistic fervor in the United States, Israel, and the Middle Eastern countries, and even leading to the unilateral invasion of Iraq by the United States.
What does this mean to us as IT professionals? It means that we are probably not going into some kind of Orwellian future, but we are witnessing another transition from globalism to nationalism. While the current administration’s international policies have moved strongly to the nationalistic, they maintain a globalistic leaning toward economic policy. In the current administration’s view, corporate profits and the New York Stock Exchange numbers are proof that the economy is thriving. Soon, corporate excesses will result in a renewed government interest in the people of the United States rather than its corporations.
Glimmers are already visible. A recent survey of 2,000 CEOs has found that interest in offshoring is waning. Only 25 percent of these corporations were doing any offshoring. The number considering offshoring is down from previous surveys. A number of organizations have abandoned their offshoring efforts. CEOs are now able to measure the benefits of offshoring based on earlier efforts, and they’re finding that the savings are not what they expected. Companies are also concerned that offshoring may tarnish their image among consumers and have an impact on sales.
Based on past history, things will get better economically for American IT professionals as well as other Americans. But also, based on past history, we must keep nationalism in check.