I called my bank earlier this afternoon to inquire about my debit card. I was first asked by a machine to press various buttons, and then told that if none of the options listed applied to me, I could stay on the line before someone dealt with my call. I was soon put on to an Indian woman, who was able in no time at all to supply me with the details I needed. The contrast in typical attitudes to these two parts of the call prompted me to respond in detail to those who recently attacked the decision of HSBC to move its call centres to India. Because if you are like most people, your reaction to the above scenario would be to welcome the way a machine enables people to use a helpline service precisely and swiftly, but express anxiety at the way an Indian does the same. While few but those directly affected decry technological advancements when they mean a British company can have some work done by machines more cheaply or skillfully than by local workers, it is a general feeling that if a British company can have some work done by foreigners more cheaply or skillfully than by local workers, then it is a very bad thing. Robin over at PolitX deemed the latter "job poaching, pure and simple".

I forget who it was noted that anyone who invented a machine tomorrow that could inexpensively convert grain into motor cars would be widely hailed as a hero and a genius, even while it was accepted that some workers in the old car plants would need to find new employment. But, the example went on, if it were revealed that this 'inventor' was in fact surreptitiously trading the grain with foreigners for the cars that they mass produce, he would soon be condemned as a job-destroyer and a heartless profiteer. Of course, the end result is the same - input grain, output cars - but as soon as foreigners get introduced into economics, it is as though the instinctive response is to assume that their gain is our loss, that they can only make money and find employment at our expense.

Let's assume the answer machine I listened to earlier costs only one-seventh as much to maintain and keep running and updated as it cost to pay the wages of any employee doing the same job. Obviously, it is now uneconomical to keep on the full staff of call-centre employees, and some will be made redundant by the introduction of the machine. Why do people usually accept this destruction of employment as a normal part of life? Because we understand at some level or other that a business that works to be as efficient as possible is better for everyone - by not keeping people on in the same positions long after they have outlived their usefulness, these firms are able to offer a cheaper, more competitive service to the consumer, who in turn has more money to spend on other things, creating employment elsewhere in the economy to counteract the unemployment created when automation was introduced.

A grasp of history helps, of course. Barely two centuries ago, it took about 95 agricultural labourers to feed every hundred people, while it now takes about 1 or 2 to feed that many. The technological innovations that made this change possible did not ensure an unemployment rate today of over 90%: the fall in labour costs to run a farm meant farm-owners could make more profit for themselves to spend and invest, and that they could sell food more cheaply, leaving far more money in their customers' pockets to spend on other things than food, creating employment elsewhere. Yes, some people suffer temporary (and perhaps in some cases permanent) unemployment when they are made redundant by automation. But the larger effect of improving efficiency in this way is positive. It is plainly mistaken to say that a company should be forced to keep all its old employees on, neglecting all the advantages of the new technology, merely in order to save them looking for new jobs. We would not be better off today if nineteen in every twenty Britons were farmers.

This isn't a particularly controversial assertion: you mostly see attacks on "job-destroying" machinery only from people who suffer directly from it. This is rightly recognised as selfish special pleading rather than a genuine economic case against such innovation.

So why are call centres different? Everything above that was said of machinery can be said too of Indian workers. Because HSBC can now staff her call centres with people on much lower wages than previously, she makes higher profits than before. As with any bank, this will enable HSBC to loan out more money and invest more where she thinks it can generate more wealth. Part of the extra revenue will fund higher wage costs, as the company can more easily afford the greater incentives needed to attract the brightest and best employees to its fold. Part will go to shareholders. And part will go to consumers, especially once her rival banks follow her lead and the competition over who can squeeze the cheapest service out of the new lower wage costs heats up. This benefit to consumers won't come in the form of cheaper calls, but it will be apparent in the more advantageous packages offered to the bank's customers, made possible by the diversion of funds from the wages of call centre employees to other areas of the company. It may also show itself in the length of time one must wait on hold as more people are taken on to hear calls. If it costs, say, five times as much to employ a British worker at a call-centre as an Indian, then you wouldn't expect to see exactly five times as many Indians manning the lines. But it is reasonable to suppose that you will see a greater number than before when the cost of a handful more call centre employees is now a fraction of what it was.

Every one of these effects - a better return for shareholders, higher wages for some employees, more money for the bank to invest and to loan out, a better package and greater returns for customers - will leave people with more money to spend and invest, creating many new jobs.

Indirectly, the wages paid to Indian workers will help British exporters, too. This is not because the Indian workers will themselves be paid in pounds. It is because HSBC will have to trade sterling for rupee to pay those workers, and so the intermediary will be supplied with pounds, which he will in the end have to spend on British goods if he is not going to hoard them pointlessly. Just as with machines taking helpline calls, there are losers, at least in the short-term. But the gains in employment and to the general economy must not be ignored, nor shunned for the sake of forcing firms to keep people in 'a job for life' long after that job has little to offer the company.

So if there is a general gain to Britain from this process of outsourcing, what is the effect on India? Can we sleep easy at nights knowing that people are being paid sweatshop wages for our benefit? Here is one answer:

While British workers will take call-centre jobs only when they have no choice, Indian workers see them as glamorous. One technical support company in Bangalore recently advertised 800 jobs. It received 87,000 applications.

... Low as the wages for these positions are by comparison to our own, they are generally much higher than those offered by domestic employers. A new middle class is developing in cities previously dominated by caste. Its spending will stimulate the economy, which in turn may lead to higher wages and improved conditions of employment.

The quote above is not the confident apologetic of King of the capitalists Milton Friedman, but the grudging admission of Pied Piper of the protectionists George Monbiot, in a typical column which ignores all the above advantages to Britain of outsourcing. Talk of third world sweat-shops run by Western companies is almost always misleading. Are Indians who turn up for work each day to staff call-centres or sew our shirts doing so because they are too stupid to realise they are being bled dry by fat-cat capitalists? Or do they turn up every day because these Western companies are famous for their high wages and because they know that the opportunities they offer are unrivalled by any other employer? What do you think? Just as you or I wouldn't involve ourselves any voluntary trade unless we both ended up better off afterwards, no one is going to accept or offer a job unless both parties would be better off as a result. The children of the woman I spoke to probably had a better Christmas this year than they've ever had. Indians gain from outsourcing just as we do.

We should certainly be sympathetic to those workers who are made redundant by machinery or by foreigners able to work for us more efficiently or cheaply than they can. But this sympathy must be tempered by acknowledgement of the benefits of such changes, and recognition that these benefits greatly outweigh any gains from attempting to secure particular jobs for life.

Posted by Peter Cuthbertson | Permanent Link |

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Friday, December 26, 2003
 

Quote of the Day

"After visiting Israel to discuss the peace process, the Egyptian foreign minister visits the Al-Aqsa Mosque. While praying, he is mobbed and pelted with shoes by 'Muslim militants -- possibly Palestinians' (who else, really?) and, according to the BBC 'the incident is sure to cause some embarrassment for the Israelis.'" - Jonah Goldberg explains what he describes as 'BBC logic'

I think it is now absolutely safe to say that no observant, intellectually honest person with the capacity to distinguish objectivity from his own views can any longer deny the BBC's cultural and political bias.

Posted by Peter Cuthbertson | Permanent Link |

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Tuesday, December 23, 2003
 

My Christmas message

Today I finished my post office job, but I am now taking a short break under the assumption that few will be reading even if I do post over the next few days. I have lots lined up for my return, however. When I get back a day or two after Christmas, I'll give you sexually transmitted diseases, a defence of the Daily Mail, votes at sixteen, Libya, prison conditions, France and of course the 20 Worst Lefties of 2003. Have a great Christmas ... unless you prefer the term "Winterval" or "Solstice" or something, in which case I merely wish you a 25th of December marginally less dull and empty than your indoctrinated minds.

Posted by Peter Cuthbertson | Permanent Link |

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Quote of the Day

"Is there any way I can give up being a pensioner and apply for asylum instead? By my reckoning, I'd be three times better off!" - A letter in today's Sun

Posted by Peter Cuthbertson | Permanent Link |

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Saturday, December 20, 2003
 

What I am up to

I am currently blogging even less than I normally do, as you may have noticed. Until 24 December I am working for the Royal Mail, helping with the Christmas post. I shall try to compensate this weekend, if I have time. In the meantime, please bear in mind how much it helps to include the post code on your Christmas cards. It appears some foreign readers will also be surprised to read that England is not in fact a province of Wales. Remember that when sending your cards.

Posted by Peter Cuthbertson | Permanent Link |

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Tuesday, December 16, 2003
 

When you're a pessimist, even when you're right it's depressing

An exchange in the comments over at Harry's Place:

"When Peter Cuthbertson and I were at the House of Commons last week for PMQ, I commented on how flimsy the Christmas tree is. He responded that he was surprised they were still allowed to put one up, and that in a few years they might not be. I poured scorn on this, but who knows?" - Jackie D

"On Christmas trees, I've heard that the Christmas Tree in Trafalgar square is 'due for review' in the next few years as well. It doesn't chime with the 'inclusiveness' of the new pedestrianised side." - Matthew

It's surprisingly easy to let out a full sigh while grinding one's teeth, isn't it?

Posted by Peter Cuthbertson | Permanent Link |

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Link of the Week

DumbJon, Lord of the Rant and serial commenter on many blogs, has been urged by me to set up in his own right for a while now. Whether through my influence or not, he has finally done so, and an already fine weblog is the result. My one criticism would be that it seems overly reliant on lots of quotation from news pieces. I take the view that if someone is interested, then a link to the piece is sufficient for him to follow it up. Quoting so much directly just makes a post over-long and something one dashes through to find the original content. But that one flaw aside, very good stuff. Check it out.

Posted by Peter Cuthbertson | Permanent Link |

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Thursday, December 11, 2003
 

Thoughts on Charles Kennedy

Paul Richards picks up on the Guardian's little musing on what fate meets Charles Kennedy. The Liberal Democrat leader has in the last four years faced Tory leaders taken seriously only by a minority. But with Tony Blair and Michael Howard now representing their respective parties, he is suddenly very junior to both of his rivals. This creates a problem for a leader who, to put it kindly, has not done much for his party.

I've pondered Charles Kennedy's leadership strategy - if that's quite the word - on and off for a while. And I think the best label for it is 'elitist populism'. This is a strategy of week after week and month after month making the most vulgar, shameless appeals to the media elite, to the liberals and lefties who currently dominate what remains of our establishment when you take out the government. Think of Any Questions audiences, of the Independent letters page or the Guardian opinion section. Charles Kennedy speaks for them. If they are angry that the US executive and legislature won't sign up to Kyoto, so is he. If they want to see more pressure put on Israel to be nicer to Arafat and his suicide bomber-training chums, so does he. The best single barometer of what Charlie Kennedy thinks and does is probably the BBC's Question Time. If the Question Time audience applauds a point, it's probably already halfway into the Lib Dem manifesto. Kennedy's shameless, continuous appeal is to this section of British society and to their opinions on the UK and the world. That's why being far kinder to asylum seekers bogus and otherwise is so high on the Lib Dem priorities. That's why the UN matters so much to the party. That's why Kennedy has spent week after week after week at Prime Ministers' Questions pleading the case of the Guantanamo captives.

To someone who believes the BBC gives an objective perspective, this world of enlightened liberal opinion - where Israel and the US can do no right, where prison doesn't protect the public, where the Daily Mail is worse than Ian Huntley, where pensioners die in hospitals simply because taxes are too low and where wiping out terrorists only encourages them - will also seem to be a very significant chunk of British society. Just as important, it has unkind things to say about the Tories and New Labour. What more could Charles Kennedy hope for? By claiming these voters as his own, little Charlie can lead his party to its greatest victories in decades!

The trouble for him is that enlightened liberal opinion is not very widespread in common sense Middle England. Certainly his positions play exceedingly well when presented to a BBC audience, but when playtested at election time elitist populism will turn out to be about as popular as a Tottenham scarf at Highbury.

Now of course I exaggerate more than a little. I don't really think that Charles Kennedy decides all his party's policies in this way, or that it is a conscious strategy. Many of these ideals he surely believes in quite fervently. But I would contend that it is about the best way to interpret and predict the Lib Dem approach to grabbing the news and responding to issues on the agenda. The party is not going for the British people as a whole - it is trying to win the argument on the liberal media and bring along whoever it can as a result.

It's debatable whether Kennedy actually had anywhere else to go. The right and centre seem to be pretty cornered off as it is, so the only alternative to the pinko-liberal left was the outright socialist left, the pursuit of whose constituents would lose the Lib Dems an enormous number of their traditional voters. So why not add to the Lib Dem core vote by winning over a few Guardian readers? But it's not much of a plan for victory, and ambitious Liberal Democrats are right to wonder if anyone who would adopt it is fit to be leading them now that two of the leading figures of modern politics are running the other two parties.

It's important to stress just how much Liberal Democrat election success is dependent on Tory doldrums. Since the party was created in its modern form in 1988, its performance at General Elections has been remarkably static. In 1992 they won 19% of the vote, in 1997 it was 18% and in 2001 they got 19% again. From 1992 to 2001 there was Black Wednesday, two Labour landslides, plummeting turnout, the euro, you name it. But all these events had minimal effect on the Lib Dem share of the vote, or at least cancelled each other out. What turned the party from a rump of twenty MPs in '92 to not far off three times as many in 2001 was the state of the Conservative Party. For as long as the Tories remain in their worst state in a hundred years, the Liberal Democrats matter. But a Tory recovery shows every sign of destroying them for a generation.

This is the threat Michael Howard poses to the Lib Dems. Dare they stick with little Charlie Kennedy?

Partly owing to a lack of any obvious alternative - even Simon Hughes has now moved out of frontbench politics - and partly because of proximity to another General Election, now expected in less than eighteen months time, it seems likely they will. These difficulties would be ignored if Kennedy appeared a huge impediment, but he is ineffectual rather than terrible.

But just as likely has to be the proposition that the next election will be a time of considerable gains for Michael Howard's Conservatives, with the Lib Dems falling right back as a result. That means that with Labour celebrating a historic third term and the Conservatives at their strongest in well over a decade, the Liberal Democrats could be the greatest losers of 2005/2006. Unless they can pull off some pretty spectacular 'decapitations' of senior Tories, it would be very difficult for them put a brave face on any such result. At that moment, then, a replacement of the man who is by far their most public face would seem both prudent and deserved.

Posted by Peter Cuthbertson | Permanent Link |

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Wednesday, December 10, 2003
 

All of the West has a common enemy in radical Islam

Those opposed to the war on terror are able to make their case sound stronger than it is by appealing to the patriotism and even the common sense of the uncommitted listener. They can do this by suggesting that even if Al-Qaeda is a threat, the threat is posed only to the United States, not her allies. Even if Hamas is a deadly foe, it's a foe Israel alone has to worry about. "It's not our fight."

For that reason, I think it is important to stress recent revelations that an Al-Qaeda plot to 'nuke' London was foiled in 2001, and that Hamas planned to launch suicide attacks in New York. The Islamofascist menace that has imposed itself on Australia, on the United States, on Israel, on Turkey, and in various forms on Britain, may go by different names. But they perceive us all as a common enemy. Homocide bombers who attack Israeli children hate the US, Islamoloons who smashed New York and Bali wanted to make London a target. The threat is not restricted to any one nation or any one foreign policy - it is to all free Western societies. Each nation is a potential target whether or not they work together to defeat their common foe. A refusal to co-operate really is nothing more than, in Churchill's words, feeding a crocodile in the hope that it eats you last.

Posted by Peter Cuthbertson | Permanent Link |

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Quote of the Day

"Go back to the newspaper indexes for the years immediately preceding the passage of the Civil Rights Act of 1964, and you will find a steady sequence of stories about hotel chains and restaurants and other service providers renouncing racial favouritism or segregation in their operations. Replay the kinescopes of newscasts and documentaries or read the civil rights coverage in Time and Newsweek from the years just before 1964, and you will observe a nation run by whites coming to grips with the injustice of racial prejudice in ways that would have been unthinkable a decade earlier. America did not make progress against racism because Congress passed the Civil Rights Act of 1964; Congress passed the Civil Rights Act of 1964 because the nation was so committed to make progress against racism." - Charles Murray

Posted by Peter Cuthbertson | Permanent Link |

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Tuesday, December 09, 2003
 

Preview: The 20 Worst British Lefties of 2003

There is a great post over at Right Wing News on the 20 Most Annoying Liberals in the United States for 2003. I thought this country really needed an equivalent, so I am now working on the 20 Worst British Lefties of 2003. The full list and reasons will come soon, but in the meantime, here is a preview of five of those names.

EDIT: Originally I planned to come up with only 10 Worst Lefties, with the names below being #6 to #10 in that list. But when I put my thinking cap on, I realised I could list twenty. That full list, in which the five names below all appear, will be posted soon.

David Blunkett

Throughout 2003, and stretching before that, the Home Secretary has talked tough and promised to act tough on our asylum system. Some of his statements were common sense, others more than a little unpleasant. But he signally failed to sort out rates of migration to these islands, which have peaked after being consistently low for a quarter-century. For every tough word, there has been another liberal policy, another amnesty for bogus asylum seekers which will encourage more to come to benefit from the next amnesty. With rates of migration to Britain now predicted to be at two million over the next decade, with all the evidence being that people want anything but a new wave of mass immigration, one can only imagine the harm that will be done to race relations because of this government's failure. This all mouth and no trousers approach climaxed in the government's disgusting announcement last month that it would take into care the children of bogus asylum seekers who refused to leave Britain after they had been rejected. In his cynicism Blunkett fails to realise that it isn't cruelty or vindictiveness people want: it's fairness. Let us hope that in 2004 the Home Secretary can learn to keep his mouth shut and will get to work on delivering it.

Greg Dyke

When the Royal Navy banned the BBC from being watched on deck, the anti-war bias being so bad, the response of this big-name Labour donor turned BBC Director General was not to investigate why his organisation's editorial line was so indistinguishable from the Guardian's, but to go to the United States to denounce the consequences of broadcasting freedom and genuine competition there.

The BBC topped off this outrage by producing a four part series glorifying the evil Cambridge Four, traitors who abused their positions at the heart of the British establishment to pass on military secrets to Joseph Stalin, ensuring the deaths of hundreds of British intelligence agents and thousands of brave resistance fighters in Eastern Europe.

Polly Toynbee

Besides describing the NHS as the most efficient health system in the world, welcoming every measure that makes Britain worse, calling for Blair to implement PR to "exclude the right from power for ever", Toynbee has spent 2003 above all demanding free universal child care for the under fives. Her horror at the idea of young kids being raised by their own parents was summed up in her call - sounding like something right out of Brave New World - for the state to be the best parent any child can have. Perhaps the leading representative of truly useless and reactionary politics in Britain, Polly's answer to every problem is more government, but she can't even match her determined defence of the mega-state with a commitment to basic democratic ideals.

Clare Short

'Resign: Will she, won't she?' the press raged, as Miss Short restated again and again her absolute opposition to a war on Iraq without UN endorsement. I mentioned BBC bias above, and Clare Short in the first quarter of this year was the perfect example of the subtle but permanent effect of this. "The conscience of the Labour Party" was the phrase we heard from them again and again and again, as if this closed-minded leftist who in Cabinet regularly compared the Ulster Unionists to Mosley's British Union of Fascists was Jimminy Cricket to Tony Blair. Just imagine someone like John Redwood being described as the conscience of the Conservative Party. It wouldn't happen.

So when Blair didn't listen to his 'conscience', what did this conscience do? Nothing. After all her promises, after everything she said, Clare Short stayed in the cabinet as war was waged, her career ending (hopefully for good) with a futile resignation weeks later.

Gary Younge

Gary Younge began 2003 as the Guardian's new Washington correspondent, and soon returned to the same old pitch - race, race and race everywhere. In his world, if Gary Younge's shelf falls off the wall, it's because of racism. If a black woman makes a spelling mistake, it's because of racism. If it rains on a Thursday, it's because of racism. Of course, I exaggerate. Or do I? This is a man who condemned the British Army for having so few ethnic minorities among its ranks while condemning the US Army for having so many ethnic minorities among its ranks fighting wars in which they supposedly did not believe. Gary Younge exists to serve the modern left's need to feel ever more liberal guilt, a job he serves perfectly, which is infinitely more than can be said for his performance as a journalist and columnist. Well, you made it to #6 this year, Gary, but as Jackie has said, "it ain't because you is black. It's because you is crap".

Posted by Peter Cuthbertson | Permanent Link |

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Sunday, December 07, 2003
 

Link of the Week

It has been ages since I updated the link of the week, so let me atone for that now, about a month too late. Little Green Footballs is much criticised by the sort of people whose praise would be cause for concern. And to be fair, the comments section is absolutely dire: a sort of right-wing Democratic Underground without the conspiracy theories. But the site itself is full of insight into the Islamofascist culture with which the West is now at war - and into those who seek to appease and apologise for it. An energetic and unique blog.

Posted by Peter Cuthbertson | Permanent Link |

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