2006-06-18

US Company Covets Burgeoning Middle Class in India, China

Google wants to sell products to the Indians and Chinese. Not the starving Indians and Chinese that Meathead's wife used to beg money for on cable TV during the days that capitalism could gain no foothold in those nations. Rather, the rich, greedy bastards at Google -- an evil corporation! -- needs as many people as possible in those nations to have as much money as possible, in order to purchase stuff. This indeed reeks of an international corporate conspiracy. Non-dictatorships in the muslim world would also lead to rich targets for such corporate exploitation.

Why do leftists believe that free marketeers seek a perpetual mass of slave laborers? Not a single blueprint or documented advocacy exists for such a business model. Yet the shelves of Borders brim with free market economists noting that Henry Ford and Bill Gates profit more from free societies comprising wide populations of wealth than they do from dictatorships charactorized by stagnet poverty.

3 comments:

Paul Hue said...

This article also demonstrates how that "outsourcing" money returns to the US.

Nadir said...

I disagree with your assessment on a couple of points.

According to the CIA World Factbook China has a population of 1,313,973,713 (July 2006 est.)

"Measured on a purchasing power parity (PPP) basis, China in 2005 stood as the second-largest economy in the world after the US, although in per capita terms the country is still lower middle-income and 150 million Chinese fall below international poverty lines."

And...

"China has benefited from a huge expansion in computer Internet use, with more than 100 million users at the end of 2005."

Compare that to a total US population of 298,444,215 (July 2006 est.). That means that the pool of Internet users in China equals about a third of the US population. According to the factbook there were 203,824,428 in 2005. That means China's growing market is 50% that of the US.

So even though a large number of Chinese are dirt poor, 100 million users are a lot of customers. The growth in the Chinese economy and the seeds of Western consumerism that have been planted in the nation mean that many more Chinese will become Internet users over the next decade or two. And these numbers don't include Hong Kong, Macau and Taiwan.

India had 50.6 million Internet users in 2005 out of a total 2006 population estimate of 1,095,351,995. The Indian economy "has posted an average growth rate of more than 7% in the decade since 1994, reducing poverty by about 10 percentage points. India achieved 7.6% GDP growth in 2005, significantly expanding manufacturing."

This doesn't mean that poor workers in sweatshops making IPods or car parts will ever be able to afford computers, but a small percentage of their countrymen will. 100 million is only 7.6% of the Chinese population.

But that small middle and upper class is a lot of folks just from shear numbers. And Google's primary source of income is advertising. All they care about is eyeballs. The poor eyeballs may never see the Google logo, but it doesn't matter. Google will make all of their money off of the small percentage of rich people.

This also isn't much of a case for your outsourcing argument. First off Google is Internet based. They could have Chinese Americans (working in America) run Google China. That would still employ US workers (though I am not sure that this is the plan). Same thing in India by the way. But it would be cheaper to employ domestic workers in those countries, and they probably will.

What money comes back to the US? How many shares of Google do you own at 390.7? Google shareholders will make most of the money from their outsourcing to India and China.

Nadir said...

But anyway. It is much better for corporations to have lower wage workers in a capitalist society. This is why you hear the argument, "Hey! They are making 40 cents a day. That's more than they would make if they didn't work at my factory. I'm improving their quality of life."

Perhaps a little. But not enough.

Same argument: "Hey! If you raise the minimum wage from $5.15 to $7.25 you'll bankrupt the company. It doesn't matter that my workers who make $8.00 per hour can't pay rent."