Adventure Capitalist

My previous defense of geoarbitrage woke some heated debate, mostly offline and in various e-mail threads, one which apparently fantasized about beating my “stupid face into an indistinguishable mass of red pulp”. It would seem after six years of blogging in various incarnations I’ve amassed an impressive amount of people wanting to do me bodily harm for my views. I’ll take the fact that I’m able to stir strong emotions with my words as a compliment.

However it seems that the remaining criticism I have received broadly falls into three different main categories which I will address in this post:

• Ascribing me views and opinions I do not hold.
• Assuming the lack of instant, visible, nationwide gratification for the poor nations is the same as lack of progress.
• Crass self-interest disguised as concern for the poor.

What I Do Not Defend or Believe
First of all, the original post was mostly written in the context of white-collar geoarbitrage. I very much doubt that a Philippine virtual assistant is dangled over a meat grinder and lowered into it if he/she does not answer Skype calls swiftly enough.

I do not in any way condone or defend insecure or dangerous work environments where costs are cut by purposely endangering factory workers. I believe it is a basic requirement that people should not be subjected to any undue risk or danger because someone wants to save a few bucks by not using proper safeguards or modern, safe equipment. That is simply unethical regardless where ever it happens.

That Which is Seen, and That Which is Not Seen
Frederic Bastiat was quick to point out that any economic policy or action should not only be judged by its visible and immediate effect, but by ALL of its effects, immediate, delayed, indirect and those that will never occur as a result of the action or policy. This is worth repeating when people get frustrated over the slow progress in poor countries in spite of foreign investments.

Lack of immediate progress is not the same thing as absence of progress. Instant gratification is a very rare phenomena and should not be expected, especially in an environment where the starting point is anything but great.

Change does not happen overnight. 50 years ago Singapore was as poor as Mozambique while Sweden was one of the three richest nations in the world. Today, Mozambique is still piss poor, while Sweden is still relatively affluent (yet has fallen back a bit) and often held up as a shining example of the “third way” between capitalism and socialism. Singapore? Well, they are now one of the worlds richest nations with a infant mortality rate that is lower than Sweden’s. That’s what I’d call progress, and rather quick at that. Yet it took Singapore the better part of 50 years to catch up with and pass Sweden. Some of the poorest countries can do the same, but it will take time, and it will only happen with effective governance, low corruption, the rule of law and a good business environment. Fail at any of the above and progress will be sluggish at best, but it won’t be the fault of foreign investors.

Self-interest Disguised as Concern For the Poor
This I suspect is the single biggest objection people have. Having been in IT, and started working in the wake of the dotcom bust as offshoring became a hot potato, I think I have an informed perspective on this. In fact I used to belong to the “it doesn’t work, it’s wrong, it’s exploitative”-crowd.

A lot of Westerners fear that their high wages will be undercut by cheap labour in emerging nations and protect their privilege with tooth and nail. Obviously speaking solely to protect your own undeserved privilege from the competition of the hard working poor would be considered bad form, but fear not, a solution exists!
Let’s just change the rhetoric ever so slightly so that we become the vocal defenders of those poor people from exploitation by The Man (even though they never asked you to speak for them)! Some people in this category probably don’t even realise their post-rationalisation to the point where they probably believe the crap that they are smoking.

But let’s not fool ourselves - in the case that a western job is undercut by a worker in an emerging nation, the new worker is not the actual loser, he is the winner. You, the westerner are the loser. Railing against the way of the world at that point is not out of some deep seated sense of justice and defense of those poorer than you, it is pure self interest, so at least have the decency to admit it to yourself. Anything else is just tasteless hypocrisy.

As I said in my previous post, no one has a God given right to work at an excessive wage. Just because you made $100000 last year does not mean it is your right to make the same amount in perpetuity. For better and worse, the world is a competitive and constantly evolving place, if you want to stay ahead, you need to adapt and invest in yourself so you have the skillset and mindset to continue to provide value for employers and customers in the future. Sitting back and expecting the good times to keep on rolling is the surest way there is to be knocked of your selfmade piedestal and be left behind.