Saturday, October 24, 2009

The Flat world clashes with HBD Part One

So I've been saying for awhile now that we are living in a "flat" world in which distances and national boundaries aren't as important or constricting as they were before. This reality is easily demonstrated in the world economy through the devastation of American manufacturing and the outsourcing of tons of low end white collar jobs.

But no one talks about the real scary culprit of the decline in manufacturing: increasing automation and inability of american workers to keep up.

Considering that 85% of Americans have cellphones and while lagging behind some others, we are still one of the most connected countries in the world. Yet, Thomas Friedman has words of warning that are quite prescient:

“Our education failure is the largest contributing factor to the decline of the American worker’s global competitiveness, particularly at the middle and bottom ranges,” argued Martin, a former global executive with PepsiCo and Kraft Europe and now an international investor. “This loss of competitiveness has weakened the American worker’s production of wealth, precisely when technology brought global competition much closer to home. So over a decade, American workers have maintained their standard of living by borrowing and overconsuming vis-à-vis their real income. When the Great Recession wiped out all the credit and asset bubbles that made that overconsumption possible, it left too many American workers not only deeper in debt than ever, but out of a job and lacking the skills to compete globally.”

Basically, this is the challenge we face right now in maintaining the US as the top dog economically.

But this is where it hits us on a personal level:

“If you think about the labor market today, the top half of the college market, those with the high-end analytical and problem-solving skills who can compete on the world market or game the financial system or deal with new government regulations, have done great. But the bottom half of the top, those engineers and programmers working on more routine tasks and not actively engaged in developing new ideas or recombining existing technologies or thinking about what new customers want, have done poorly. They’ve been much more exposed to global competitors that make them easily substitutable.”

Those at the high end of the bottom half — high school grads in construction or manufacturing — have been clobbered by global competition and immigration, added Katz. “But those who have some interpersonal skills — the salesperson who can deal with customers face to face or the home contractor who can help you redesign your kitchen without going to an architect — have done well.”

Just being an average accountant, lawyer, contractor or assembly-line worker is not the ticket it used to be.

I think that's scary. Steve Sailer agrees too, but points out some basic problems in Friedman's analysis.

I kind of have the impression that quite a few Americans, like, maybe, two or three hundred million of them, don't possess either the IQs or the personalities to be rainmakers. Are they permanently obsolete in the world that Friedman has been such an energetic cheerleader for?

And there you have it folks. While Friedman is fundamentally correct in his assertions about what hurts us, he's blind as to why it will be nearly impossible to overcome. Because everything can be low skilled can be done cheaply in the third world or automated. White collar work that involves thinking can be done over the internet. No one is untouchable from the need to compete with the world.

But what, ultimately, is the quality that determines who wins and who looses their job in the global economy?

Intelligence and IQ.

Flat world folks, meet HUMAN BIODIVERSITY and the fucked up reality:


Demography is destiny

Oh shit.

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