Why open source is growing by leaps and bounds

Oh man! Ad-blocking software has been detected! :'(

This website is run by the community, for the community... and it needs advertisements in order to keep running. Blocking our ads means your killing our stats!
Please disable your ad-block, or become a premium member to hide all advertisements and this notice.

Here is an excerpt from a CNet blog on MS's pricing structure in Brazil. He gives a very sane point of view on how MS operates, and it's attitude towards its customers.

You can read the rest of Matt Asay's article here

Edit. It looks as if the HTML table didn't come through in the copy and paste. It shows the relationships between income and MS's pricing structure in the US and Brazil.

 

Oh man! Ad-blocking software has been detected! :'(

This website is run by the community, for the community... and it needs advertisements in order to keep running. Blocking our ads means your killing our stats!
Please disable your ad-block, or become a premium member to hide all advertisements and this notice.

You can now get Vista in China for US$66, verses US$199 here at home.
http://www.itworld.com/Comp/2218/070803vistachina/index.html

I think this also highlight the unfairness of globalization and outsourcing. It's not wage inflation that's the problem, it's the exorbitant cost of living that's the problem. Maybe they should lower our taxes to make us more competitive? Nah, that's not going to happen!

 

Yup. You are exactly right. Outsourcing and globalization have done a lot to ruin the standard of living in countries like the US and UK. We used to make all our own products, now we import everything and all the higher paying manufacturing jobs are gone, and a lot of those people had to go to work at less than 1/2 of what they made before.

IT isn't the only sector of the economies of our countries that these things have destroyed.

 

While I agree the tax burden in most of europe is HUGE, I don't think its quite that simple. Customers want cheap goods or they vote with their feet, so in any market with true competition companies will be forced to cut costs to match its competitors. While the tax burden is very small in third world countries as little is spent in infrastructure, the wage is also extremely low as is the standard of living. Theres just no way we can compete on a cost basis, we have to compete on creativity and innovation.

Hackers essentially created many of the last booms, home PC, internet, mobile phones, people who would pull things apart and see how they work.

India now has some very prestigious Universities, whats chances they might create some great minds ?
China makes millions of electrical goods, what chances they might churn out a few good engineers ?
Brazil produces its own generic pharmacueticals, what chances they might produce some good chemists ?

Globalisation is here to stay...

 

I'm sorry
what basis are you saying that globalization has LOWERED the standard of living in the western world? thats got to be the most unfounded comment I have ever heard you make Freddy!
Do you seriously believe that?

Outsourcing has caused problems sure, I'm not sure how you can blame globalization for lowering your standard of living though, in the last 50 years since globalization started to become the norm the standard of living in the western world has increased to know end, the class systems of the last century have started to vanish etc etc

 

It's hardly unfounded. The manufacturing jobs that have left the US were high paying jobs and the backbone of the middle class. Those people made $70-80,000 a year, plus good benefits, back in the 80's and early 90's. When their jobs went overseas they had to move to service-related jobs that paid less than half of what their former jobs paid. However, even though the corporations were now paying far less to have their products built the consumer prices didn't decrease, they increased.

That brought on a huge increase in debt in consumer debt, a large decrease in consumer saving, and the middle class in the US is just flat out disappearing. People are maintaining their life style on debt, not on earnings as they used to. All this means real wealth has decreased, not increased.

Compare how much debt the US has now compared to what it had 50 years ago. Compare how much debt the UK has now compared to what it had 50 years ago. You'll see huge increases in debt. That means any increase in the standard of living is based on debt, not real wealth. Thus the standard of living is an illusion. It does not represent reality in any way, shape or form.

 

Nobody forced those people to take on the debt, people have been living beyond their means on 'cheap credit'. This is a slightly different aspect of globlisation than the opening up of markets and off-shoring labour.

What should have happened is people should have reigned in spending, instead they gorged themselves on credit, to the extent that the price of everything in limited supply is inflated. House prices are normally tied to income, we've seen them triple in 10 years. Earnings are up maybe 80%.

I think most of the manufacturing jobs were actually fairly low paid working class jobs. Probably more significant is that whole industires have moved to other countries. Trade deficits have also meant that currencies get devalued coupled with rising prices of imports now could result in inflation...

 

dmarsh,

First off, the manufacturing jobs in the US were all union scale jobs. Those people made good money. Do some research on what kind of money workers in the steel mills and auto industry in the US made 25-30 years ago.

Second, when you have a family that is used to living at a certain level of income you accumulate a certain level of fixed debt that isn't outrageous for what you're making. Now, take away 50% of your income and your debt level just kills you. Just for your family to eat you have to put your groceries on your credit card.

You say, well, they should sell their house and reduce their payments. Well, when there are 10,000 people in the same town who worked in the same plant you did that just closed what do you think happens to the real estate market? There are far more sellers than there are buyers. You basically cannot sell your home and the value of your home plummets. It becomes an albatross around your neck.

The fact of the matter is that more and more people live on debt. It's just a fact. It doesn't matter if it's something they could avoid or not, most people just do it because they want to live "the good life". It's how they get their two new cars, their boat, their RV, their motorcycles and snowmobiles, while living in a nice house. The people in the US used to live like this on a far lower level debt, and normally with just one wage earner. Most wives used to stay home. Now it requires two incomes just to support the debt load.

These are all symptoms of a decrease in real wealth.

 

I see your point, I'm well aware of many people that make good money doing working class jobs. My point was the original typical offshore jobs are PCB assembly and call centre etc. These were never well paid.

I have been made redundant myself in the past and have seen members of my immediate family go though real hardship including negative equity. These things happen, if you have ANY debt you are at risk.

I have no debt whatsoever, I have one cheap car, no house, no boat, no wife, no kids, no RV, no motorcycles, no plasma tv, etc etc maybe one day i'll be able to afford such luxuries... but then I don't really subscribe to the consumerist viewpoint, do people really need this stuff ?

So every sensible tax payer and the central bank should 'bail them out' just because they want the good life ?

I'm far more concerned about the people in the world starving than people having their TV repossed...

 

That may well be true for the UK, but here in the US things have happened differently. Most durable goods--things meant to last more than 3 years--are either manufactured completely overseas, or have the majority of the components manufactured overseas and then only the assembly is done here.

The steel industry is basically a shell of what it used to be. Most steel is now imported. The steel industry paid very well, even better than the automobile manufacturing jobs.

Almost the entire textile industry has moved all their manufacturing off shore too. Those jobs again were good paying jobs. About the only clothing and textile manufacturer left in the US is Pendleton Woolen Mills, and their goods are expensive. Good quality but expensive.

All manufacturing of major appliances is now done overseas. Once again, these were good paying jobs.

The timber products industry has collapsed too. People who worked in it made very good money. My old man used to make $200 a day back in the '60's falling timber. That's when gas cost 20 cents a gallon, a new car cost around $1000, and the average home price was maybe $35,000. He was really good at what he did, but his earnings were not out of line for that industry. The average wage now for doing the same job he did then is actually less, while the prices of all goods are exponentially higher.

There are just very few manufacturing jobs left in the US. Fifty years ago they were the backbone of the economy. That meant steady work, good benefits, jobs for life if that's what you wanted, and good pay. That entire section of the economy here is basically gone along with it's wage scale. It's been replaced with service jobs that historically pay far less.

After watching 40 years of economic change in the country nobody can tell me the average Joe on the street is better off today than the average Joe was 40 years ago. It just isn't true.

 

Why didn't the UK adopt the Euro dollar? Why not open up your doors completely to immigrant labour? Don't want to tie yourselves so closely to the fortunes of the rest of Europe? That's not very pro-globalization if you ask me. Perhaps it hasn't affected you as negatively as the rest of us because you never really embraced it.

And if your expenses go up while your income goes down, then that most certainly will erode your standard of living. To maintain the standard either the cost of living has to go down or wages have to go up (or they both have to remain the same). It's not terribly complicated.

 

Again I can see your point, I'm not sure how you square this with your open source viewpoints however...

The US steal industry is imfamous for trade barriers and subsidies, should people in other countries lose their steel jobs even though they are far more competitive ?

The new economies have a right to their share of the worlds weath, thats economics.

If the current major economies fall down the world rankings then the average standard of living will probably go down in those countries.

I've really no idea, I think its because Forex is a big money maker.

Currently the Euro is up against the pound, its quite possible that entering the euro could have made us weathier at present...

There already is freedom of movement within the EU.

The UK lets in at least 200,000 immigrants each year, H1B visa limits are set at around 100,000.

I'm not pro-globalization, but "If Mohammed will not go to the mountain, the mountain must come to Mohammed.", you cannot fight against an immovable obstacle, you must instead adapt and go round.

 

Very easily. The only benefactors of the off-shoring in the country are multinational corporations, and they are not sharing the wealth with the common man. The common man is just making less money and the corporations just keep on raising prices.

Open source helps the little guy compete and helps to reign in avaricious corporate profits of which very few people see the benefits. That's exactly aligned with my point of view. I'm for helping the common man to live and prosper, and open source does exactly that.

 

China subsides its steel industry too. If you don't want to do the same at home then the only way to level the playing field is through tariffs. The issue shouldn't be "free" trade but fair trade. Tying my hands while letting my competitors abroad use child labour isn't fair. My government should be looking out for me first and multinational oligopolies second. Maybe they should even think about IMPROVING my standard of living for a change.

I would like to make a correction about how to maintain that standard, however. There is one other way to maintain your standard of living while expenses are going up and income is going down: by borrowing money to make up the difference! So perhaps it's not gluttony but necessity that has forced so many people to go into debt. Of course, you're right, they could live in grass huts and eat potatoes every day instead. I wouldn't call that progress though.

 

High wages are not the be all and end all to a decent standard of living, in fact if costs of commodity items are high they play to the class system

the reason union professionals were so well paid was because the clout the unions had kept the balance of power between employee and employer pretty level, the fact the US is worlds behind the rest of the western world in labour laws that protect employees and not just employers is nothing to do with globalization and may well of helped those employees worse off

that said, globalization is helping vast numbers of skilled workers play the exact same game that big corporates have been doing, the internet and the personal computer have meant that individuals can play the globalization field not just big corporates with endless resources, small business are now forming from diverse skill sets across national and continental boundaries, benefiting from multi time zone presence to play to a world market, not just a national one

Union workers who watched there salaries steadily climb massively over the rate of inflation due to union bully tactics for years and years didn't stand a chance with the advent of globalization, correct, but skilled workers can and have adapted, and the citizens of the US could of shouted high and low for decent labour laws to protect them where needed

 

I agree, but perhaps your government should be putting embargos on the import of steel produced by child labor? why have one set of standards locally but then accept any old crap from somewhere else? simple, because the government panders to big business not the people, that again is not a product of globalization, but one of years of government neglect

 

Oh please, lawyers have their bar associations and doctors have the AMA. I could lower the cost of medical care by bringing in doctors from India too. But the defacto medical union won't allow it. Politicians have convinced the lower classes that they're doing something different by unionizing. Well, they're not. And don't give me the argument about the quality of medical care going down... I could argue high paid steel workers produce better steel than low paid steel workers too; that's complete boolshiat.

And though I can only speak for myself in this regard, to me FOSS levels the playing field. If Microsoft can make money selling Vista for $66 in China, then as far as I'm concerned I'm paying a 200% monopoly tax when I buy a copy here for $199.

Again, what we need is fair trade/competition, not free trade.

 

Crito, not sure who that reply was aimed at, but I agree with everything you just said
bringing in foreign labour to lower medical costs would of course not lower health care standards, providing the personnel were trained to the equivalent level!

I think the steel argument is a skill not pay thing
highly skilled steel workers may well make better steel than less skilled steel workers, again that comes down to standards, why accept something of a sub par standard because its from abroad that you would not accept locally? if goods and services are provided at the same standard yet cheaper abroad, then who WOULDN'T buy from abroad?

Lets also not forget the fact that entire industries have become commoditized in the last 20 years, and industries that are not today may well be in 20 years! work forces have to adapt in these circumstances, you cant demand specialist wages for a commodity job that can be done by a computer and a robotic arm

Agree totally about fair trade over free trade, and agree about corporates playing the forex game to screw foreign purchasers
Adobe Photoshop CS3 cost me almost TWICE what it cost to buy USD (partly due to the weak $) to buy it in the UK, why on earth would I not buy it in the US? hell even with the TAX on it its still a world cheaper

 

I'd say it's a result of not enforcing anti-trust law, which would have kept companies small and competitive. Huge multinational corps now run our governments and they're the ones who really benefit from "free" trade.

 

I'd also like to point out that anti-trust law is NOT just about monopolies. If the six oil companies that do business in your country collude to keep prices high, then that's just as illegal. That's why I frequently use the word oligopoly instead.