On 12 May, an article in Spanish newspaper La Vanguardia analysed the workflow of software development companies. It made the following observations: a Barcelonian company uses Indian programmers to provide software services to US online platform companies; judging by the flow of goods, people, information and capital, the globalisation of the job market has begun; when Indian programmers draw a salary of just 10% of their American counterparts, that is indeed a “sweet temptation”.
The article’s main message is that the globalisation of the job market will bring unprecedented opportunities for enterprises. However, this might be too sanguine a view.
Globalisation of job market an illusion
Since the beginning of the internet society, there have been fundamental changes to how factors of production are assembled. People are now able to estimate the cost of resources online and put together their factors of production via the internet. For example, Spanish firms are able to break down every work process and separately hire engineers from countries such as India to work on a specific task and provide services to American computer enterprises. Such a method of combining the factors of production has led the the rise of the platform economy. However, this development creates an illusion about the market economy.
Capital plays a decisive role under market economy conditions. It hires labour around the world and comes up with the best combination of the factors of production to maximise profits. For example, the US is a capitalist country that hires labour from across the globe to work for US companies by establishing online platform companies. Its labour force has become a global one, but this does not equate to the globalisation of the job market. What is actually happening is the globalisation of capital.
Workers get more work, but not more income
While the labour force can be moved, workers are not free to move. The legal system of developed capitalist countries not only regulates goods and trade but also strictly manages workers’ mobility. Immigration agencies of developed countries, in accordance with their own immigration laws, shut out foreign workers thus creating this cruel reality: among the factors affecting productivity, labour is one that cannot move freely. And as capital hires labour from around the world, labour becomes cheaper.
As the Spanish newspaper article mentioned, Spanish software developers hire Indian programmers because their salary is way less than their American counterparts. Under the conditions of capitalism where capital hires labour, capital rules. And because this is the state of the job market and the international division of labour, life becomes tougher for workers who have no capital and nothing to their name — they can only sell their labour.
The General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO)’s promotion of trade development, along with the series of rules established by the International Monetary Fund (IMF), have created the conditions for international funds settlement. But until now, there is no designated immigration agency in the world to coordinate the flow of labour across countries. This implies that workers from developing countries can only be hired by the capital of various countries and have little choice as to their preferred job market.
Internet not the greatest leveller after all
In this aspect, capitalism can be said to be the root of all evil. Under its conditions, the role of capital is ubiquitous and omnipotent. As capital hires labour, the cheap labour phenomenon can only worsen. While workers in developing countries can gain job opportunities through the internet, the job market is closed to them; they cannot work in developed countries even though they possess the required skill sets. While capital moves freely, the free movement of labour is inconceivable, and the reason lies in capitalism.
One cannot have unrealistic expectations of globalisation or the globalisation of the job market because the latter concerns the economic system and national security of a country. Understanding this, people will not pin their hopes on the development of the network or platform economy to bring about a more equal society or the globalisation of the job market.
If Western capitalist countries, with the help of capital, enter developing countries as “online platform companies”, they are not only able to hire cheap labour from developing countries but are also able to collect massive amounts of consumption and industrial data to fully control a country’s information, thereby posing a serious threat to the country’s economic security.
The new colonies
By analysing the capital composition of developing countries, including that of Chinese online platform companies, we will realise that global capital has already made inroads into China, the world’s largest developing country.
While online platform companies have created jobs in China, much of their profits are transferred overseas through the capital market. In the internet society, developing countries including China can readily become new “colonies” of developed Western market economies or their outposts. In fact, colonial behaviour of the past has been subsumed by today’s capital. Not only can the rapid infiltration of capital bring about fundamental changes to the economy of developing countries, but it is also capable of exploiting the surplus value of the workers they hire. It is necessary that developing countries, in the process of developing internet and digital economies and establishing online platform companies, keep their guard up against the infiltration of capitalism. As long as the job market and traditional immigration policies remain unchanged, the capital of online platform companies in developed capitalist countries can infiltrate developing countries for cheap labour.
Not only that, capital also has control over corporate equity and information. The internet and digital economy are part of the information economy. The former takes care of information transfer across networks, while the latter treats information as the most basic and important asset to be managed. The digital economy uses both the industrial and consumption data of developing countries to control the country’s core economic development and dictate the path of national development. Just imagine this: If Western capitalist countries, with the help of capital, enter developing countries as “online platform companies”, they are not only able to hire cheap labour from developing countries but are also able to collect massive amounts of consumption and industrial data to fully control a country’s information, thereby posing a serious threat to the country’s economic security.
Information security could be compromised
From this perspective, in the era of the internet and digital economy, Western capitalist countries’ capital should be prevented from acting arbitrarily in developing countries by law.
Some Chinese consumers have become aware of the situation. They believe that Western electric vehicle enterprises that manufacture and sell their vehicles in China will not only gain access to the information of Chinese consumers but also harm China’s national security in terms of the use of electric vehicle information. They are urging the country to set up a comprehensive legal system as soon as possible and put in place national compulsory specifications to ensure that the development of electric vehicles will not harm China’s national interests and security.
In fact, the Standardization Administration of China (SAC) has formulated national standards for the collection, storage, and use of electric vehicle information, and is soliciting public comments. This means that while capital’s impact on the job market is not immediately visible, information security threats posed by the development of the internet and digital economy need to be dealt with urgently.
China’s solution for developing countries
China will continue to introduce foreign capital to boost economic development, and encourage domestic enterprises to cooperate internationally, participating in the international division of labour to exert its comparative advantages and maximise profit in the international market. However, China must be fully aware that capitalist countries are “semiconductors“ in the international market. They pry open the doors of a country through negotiations and allow their domestic capital, especially financial capital, to make inroads into the host country, while shutting their own doors to foreign workers.
The Chinese National Bureau of Statistics has released the country’s latest national population census. China is slowly becoming an ageing society. But compared to Japan, China is still full of vitality and its demographic dividend still exists. China should seize the opportunity to adjust its population policies on one hand, while striving to improve the quality of its citizens on the other. People are the true assets of a nation and their quality affects the country’s future. If population numbers increase but the quality of the population decreases, the future of China’s development would be bleak.
China is in the midst of adjusting its traditional education system and establishing a new science-based education system starting from the kindergartens to the universities. By relying on its national strength, China is seeking to solve the unequal allocation of educational resources and achieve educational equity, thereby improving the quality of the population to contribute to the betterment of human civilisation. At the same time, China will also provide job opportunities to outstanding youths from across the globe and also develop the country’s digital economy with capital from capitalist countries.
There will not be an international or globalised job market as long as capitalism prevails. However, China can strengthen its educational cooperation with other countries to improve the quality of populations in developing countries via education and training, thus providing a strong impetus for the economic and social development of developing countries around the world.
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