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Bootstrapping

2013 February 20
by Ian Welsh

Out of most crises comes opportunity.  Unemployment in the developed world, especially amongst the highly skilled, is opportunity for those countries willing to seize it.

Does your country not have the medicine it needs?  There are plenty of people capable of making and even inventing those medicines who are out of work.

Need roads and ports?  Plenty of those who can build them are out of work.

Need telecom infrastrucure?  The same.

A lot of highly skilled workers are out of work.  More want work that matters, they want to make medicines which will get to people at prices which will save lives, or build buildings which create energy and are good for those who live in them, or invent knew ways of farming.  They want to create energy sources which don’t dump carbon into the atmosphere and they want to build spaceships and get off the rock.

These people exist, and they are hungry for meaningful work, for good work.  Those who are out of work simply want a decent living, those who are working but hate their jobs will work for less if they are taken care of.

They are a way past the foreign currency bottleneck, they are a way past unfair patents and copyright.  Combined with pacts between countries to share key resources, they are a way to bootstrap up developing countries, or for wise developed countries to throw off the shackles of austerity and go back on a high growth path.  They can be used to bypass the old industries, to create the future in countries who didn’t win the last few technological and economic cycles.

They are lying on the ground, waiting only for those wise enough to offer them work that matters.

30 Responses
  1. Celsius 233 permalink
    February 20, 2013

    Well Ian, here’s my 2¢ worth:

    IME, most people (Americans) just don’t want to leave the U.S. Even people I know who would be employable overseas (here in Asia) won’t leave for myriad reasons. These are people who have been under or unemployed for extended periods of time. My sister (@ 63yo) is the only one I know who has done it and so far is quite successful.
    That aside, there are few jobs available because citizens (native) have precedence over foreign hires for almost all jobs.
    I first came here as a design and production engineer for an American toy company; it took over 6 months (normally 2 days) to get a work permit because the owner had to prove beyond all doubt that a native citizen wasn’t qualified for my position. In my case it was, in fact, highly unlikely a Thai would be qualified with my skill sets (this was over 10 years ago). Anyway, it is a real problem.
    Most foreigners here are teaching English to all levels from grade school through university level.
    All it takes is a bachelor degree in any field. After I left the toy company I also taught English for 5 years until I retired. By the way, I’m far from rich and couldn’t retire in the U.S.
    Africa is probably a lot easier to find legal work and I have heard Latin and South America are fairly easy as well.
    But, that still brings us back to Americans’; provincialism, and no real knowledge of the world about them, is a hugely limiting conundrum for which they are loathe to budge beyond the 4 borders.

  2. February 20, 2013

    Ian,

    do you see this as something that can be done at any significant scale at the state/region/city level? i’ve been struggling with this lately; i live in a genuinely progressive area (for the U.S.) but most of the big issues we are dealing with right now have been dropped on us by by the Fed’s in one way or anothe. For example, Oregon is a net tax giver, so the local politicians are happily bending over for the feds to get a big cash infusion for a mega-highway project which is antithetical to what they would otherwise believe in.

  3. someofparts permalink
    February 20, 2013

    They are already being put to use. When they get shoved into graves decades before their time, the rich get to take all that pension money they didn’t use.

  4. S Brennan permalink
    February 20, 2013

    I’ve been ready, willing and able for years/decades, in multiple cases I was denied a work visa after an offer was extended and accepted.

    One was Canada, apparently, the TN visa provision of NAFTA is good for Canadians, but not US citizens headed to BC. For US citizens headed north a “labor market survey” is required. It costs about a grand to have a bureaucrat in Ottawa survey Canada and see if somebody is out of work that can do, or could be trained to do the job you’ve accepted. So if some guy in the Maritime provinces is out of work, but unwilling to relocate to BC you won’t get you work permit. Now the oil patch has separate deal, the senators in the US oil patch do a much better job of looking out for their citizens than what passes for liberals in the northern states.

    Tonight when I have Wed nite cocktails, there’ll be two Canadians talking up how superior they are [why must Canada send us it's social misfits...okay, I already know].

    Same deal happened in Sweden, Argentina and Chile, mileage will vary from profession to profession, suffice to say, except for the oil patch, the US has a policy of indifference at best, but often working against engineers.

    Now some of this has to do with the ties between “PE engineers” and the “US*” Chamber of Commerce. The term of “engineer” can be used freely in the US by any individual who wishes the title only the title “PE” is restricted. Whereas in Canada and Europe the title is accredited schooling and experience alone, in the US it’s a political group whose interest diverges considerably from the vast majority of engineers. FYI, “PE’s” vary considerably from state, have reciprocals and in places like Texas, there are no restrictions.

    *The official sounding name belies it’s private, non-governmental status, with foreign and often anti US membership.

  5. Ian Welsh permalink*
    February 20, 2013

    I’m suggesting countries should do it. Canada is probably the best case scenario: developed nation, oil independent if we want to be, plenty of other fuels, we can easily go to near-autarchy and have enough money to buy what we need. We should be deciding on what industries of the future we want to own (and industries of the present) and just grabbing the necessary people and doing it. There is no reason why we shouldn’t both be bringing in immigrants in large #s and have almost no non-frictional unemployment. Other countries are not in as good a position, but creating a bloc is (theoretically) easy enough.

    I think Canada should form a bloc with some other countries — start with Argentina, bring in some other S.Ams. One high population, industrialized nation would be a good idea if possible (though not necessary), Japan is the obvious candidate (there are cultural reasons why not, but…)

    And so on.

    The limits to growth we have put on ourselves are far more self-inflicted than people realize. It’s not about MMT, it’s about bypassing bottlenecks and choosing to grow while respecting sinks. But to do so you have to detach from the financialized world economy.

    Knowledge, including practical knowledge, is embedded in people. The people are lying around, pick them up.

  6. tatere permalink
    February 20, 2013

    It seems like the biggest obstacle is the counter-intuitive nature of the process. People only see the gringo with a good job as if that is instead of it going to a fellow citizen, rather than seeing the multiple new jobs that follow. Maybe there is a way to pretty it up. I hope so, as this has always seemed like an obvious strategy. Beyond people who’ve lost their jobs, there is going to be a huge number of boomers who will be forced into “retirement” without sufficient means, but still with mental wherewithal to teach, train, etc.

  7. jawbone permalink
    February 20, 2013

    Lambert at Corrente has put up a post which addresses something of the same topic, but takes a local view on how to create new jobs and businesses.

  8. jawbone permalink
    February 20, 2013

    “…to do so you have to detach from the financialized world economy.” From Ian’s comment just above.

    How would the US detach as currently it’s almost the only area prospering in the US? The Powers That Be are so focused on making money from paper games they don’t see other businesses as worth their time and effort. Nor do they really want to loan for start ups of the such productive businesses.

    Not sure which will bring them down first: Climate change issues or their own nearsightedness about what’s happening in the economy. The PTB seem quite delighted that they’re suckering folks into the stock market again. And they control all the US branches of government, it seems to me.

    Corporatists, everywhere.

  9. February 20, 2013

    Internal exile, or external, jawbone. Those seem to be the alternatives.

  10. Jeff Wegerson permalink
    February 20, 2013

    Totally agree. The problems are political and not technical nor economic nor generally resource scarcity. It’s becoming increasingly interesting to see countries like Germany tip the point of energy costs away from fossil. Germany just needs to figure its way out of its side of the Euro trap. Meanwhile Japan is turning away from nuclear on the one hand and figuring out its exit from its longstanding liquidity trap on the other. And yes not just Argentina, but all of South America is detaching from U.S. dominance. I am now wondering if the price of gasoline might start to plunge as countries begin the exit from fossil to clean energy.

    All this talk of possible sane futures is making me thirsty. Where’d I put my glass of kool aid.

  11. Bolo permalink
    February 20, 2013

    They want to create energy sources which don’t dump carbon into the atmosphere and they want to build spaceships and get off the rock.

    Sign me up. For both :)

  12. Ian Welsh permalink*
    February 20, 2013

    I’m not talking about the US. In fact, the US is one of the places other countries would be scooping up people. That said, the US could do it too, just through a different path. I’ve talked about what the US needs to do before, indeed, ad nauseum. Start by refitting virtually every building in the country to be energy neutral at the very least.

    Maybe the US will get its act together, but I see far more willingness to act in other countries (not Canada, though that could change w/the next election), most especially some in S. America. We’re at the triage point, I’m afraid.

    Not so sure Germany is moving heavily to renewables. Seems more likely that they’re going coal.

  13. Ian Welsh permalink*
    February 20, 2013

    Tatere: certainly an issue. I think it has to be made clear that they come in, bootstrap, become locals and train/mentor locals.

  14. February 20, 2013

    @ian, this bit: “But to do so you have to detach from the financialized world economy.”

    I’d love to see politically plausible strategies for that.

  15. February 20, 2013

    “These people exist, and they are hungry for meaningful work, for good work. Those who are out of work simply want a decent living, those who are working but hate their jobs will work for less if they are taken care of.”

    I’d put it more generally – the resources exist. Out where I live, there are lots of empty offices and retail spaces. There are roads that are relatively lightly traveled. It looks like the railroads aren’t all that busy these days. I haven’t checked, but I suspect there are lots of machine resources available or not in constant use, too.

    What we are told we lack is money. To me, that’s nonsense. Modern Monetary Theorists will tell you that’s nonsense, because we’re a sovereign nation with our own fiat money. Keynesians and others will tell you that’s nonsense, because credit is as cheap as it gets right now. Either way, it’s nonsense.

    So, yes, the country or countries that grab for this opportunity will profit from it. Sadly, I’m pretty sure that won’t be the U.S. Nothing in the current political debate on the subject gives me any hope there.

  16. February 20, 2013

    Cujo, here in Berkeley CA we have (for example) lots of idle light industrial space. We also have lots of young adult unemployment. We also have a cultural fashion among young people to learn skills like metal work, CNC-based light manufacturing, textile arts, and on and on. The potential for a wave of local/regional import replacement is huge.

    And yet it doesn’t happen.

    It’s not because we don’t have the money. Local banks are lending to viable ventures and there’s tons of lets-play-small-scale-VC money around for those who can socially network with the swells well enough. Capital accumulation isn’t the (local) problem.

    The local problems are:

    (1) The property owners have already left their light industrial land vacant for over a decade in some cases. Their rent demands are purposefully outrageous so that no business could survive. On this basis they then turn to the city and say “See? No demand! You better upzone us for condominiums, high-rises, and so forth.”

    (2) For whatever reasons, the municipal staff encourage and reward that kind of rentier behavior. (As a result, by the way, the City is basically bankrupt but the hope is that they can kick that can down the road based on property transfer taxes.)

    I think some kind of government intervention is needed but I don’t think stimulus spending is it. It’s the non-viable, non-sustainable demands of the rentiers that are our main local and regional problem.

  17. February 20, 2013

    Thomas Lord writes:

    I think some kind of government intervention is needed but I don’t think stimulus spending is it.

    Interesting observations. Maybe there’s something that can be done there, should voters generally demand that it happen. For my part, I’d say it depends on the local situation. Around here, there’s probably money, but there’s also lots of unused property, and little chance it will be put to use any time soon.

    Plus, I think of “stimulus” differently. There are lots of things we should be doing in America (and probably there are other countries that should be doing them, too). We should be rebuilding our transportation infrastructure, particularly urban transit. Out here, we need much better preparation for major earthquakes and tsunamis. After Hurricanes Katrina and Sandy, it’s pretty clear that we’re unprepared for big disasters generally. We should be investing in alternative energy, energy conservation, and a better electrical grid (most of these can also contribute to disaster preparedness, by making us less dependent on remote energy supplies and also better able to re-route those remote energy supplies when needed). There’s literally trillions of dollars worth of work we ought to be doing in the next few years that we’re not, and very little of that is something we can expect will be done by private entities.

    Plus, of course, the medical care system here is maybe 80 percent the size it should be, thanks to having 40 million or so of us not included in the system.

    There’s no reason to be paying people to be digging holes and filling them in. There’s plenty of real work that needs to be done, and will make our economy better in the long run.

  18. Ian Welsh permalink*
    February 20, 2013

    Thomas,

    I’ll write something on it at some point. It wasn’t something I was going to put into my book, but it may be necessary. Thinking on it. It’s much more politically viable in developing countries, but some first world nations (or even just one) would make a big difference to its viability.

    Currency controls are going to be necessary, something which is anathema to the current ideology (even when it’s done). You mustn’t allow capsizing or bleed-outs.

  19. Ian Welsh permalink*
    February 20, 2013

    Stimulus without breaking bottlenecks will not do the job for any useful length of time. A lot of government spending will be required, but it should be used to restructure the private sector, among other things.

  20. S Brennan permalink
    February 20, 2013

    In the 30′s we did rural electrification, irrigation, and land reclamation…but we did have to wait for a pay-off. It took what business considered an eternity [that's about 2 and half years to non-sociopaths], when WWII began and we were off to the races for 3 decades.

    Anybody who says we are out of money ought to have a look at the deficits during WWII. Keep in mind, a significant number of right wing Americans wanted Hitler to be victorious…so, being parsimonious in the years leading up to the war made sense. Don’t believe me? try googling [Nazis Bush Prescott]

  21. Celsius 233 permalink
    February 20, 2013

    Solutions? There have always been solutions, but the bloody politicians (in their self interest) always bugger the works.
    And here we sit! What used to be the richest country in the world (and I don’t mean money) with its (used to be) highly educated, innovative, and can do people has been gutted.
    The unemployed are a disgusting waste of resources compounded by ageism.
    Today, a degree is a hollow piece of meaningless paper if my experience with western degreed expats is any indication; one dimensional walking bags of flesh. They can’t write, spell, or speak with any semblance of grammatical correctness. Also notable is a profound lack of curiosity.
    It’s too bad solutions aren’t manure; as they rot, they would at least be useful as fertilizer.

  22. Celsius 233 permalink
    February 20, 2013

    While I’m at it; back in the late 60′s my father wanted to start a business using retired craftsmen (plumbers, electricians, bricklayers, carpenters, etc.) to be able to continue working their trades but at reduced wages (pensions being the main income[remember pensions?]).
    Do to state laws and unions (I’m not anti-union) it was an impossible dream.

  23. Celsius 233 permalink
    February 21, 2013

    You want to read something really interesting? Read this;
    http://www.wired.com/business/2013/02/mf-clayton-christensen-wants-to-transform-capitalism/

  24. David Kowalski permalink
    February 21, 2013

    The largest importer of US labor, by far, is Mexico (738,000 individuals). Canada is next with about 250,000. I looked into working overseas when I was in my 20′s but it never came even close to getting off the ground.

    Language stands as a very large barrier for many Americans. Historically, Brazil’s largest number of immigrants has come from Portugal, a tiny country. For people working for US, UK, Canadian, Australian, Irish, or New Zealand employers that would be less of an issue.

    According to the Census Bureau, about 20% of Americans speak a language other than English at home. Most, but nowhere near all of these people would speak Spanish so a Latin American exodus would be quite possible.

    A language immersion program would bring a lot of progress in say three months for more desired employees.

  25. jcapan permalink
    February 21, 2013

    “Internal exile, or external, jawbone. Those seem to be the alternatives.”

    With a decade of each under my belt, I can only say they’re both extremely trying.

  26. S Brennan permalink
    February 21, 2013

    Projects the USA needs government development investment in NOW. [and with negative interests rates...why the hell not?]

    1] LFTR*, we get three things from it, Electricity, Fresh water [Desalination during off peak hours, no demand? fill the aquifers], and the ability to safely dispose of spent fuel rods, elimination of coal extraction-burning which the primary source of radioactive waste and mercury pollution in the environment.

    2] A substantially improved electrical grid, to include inductive cabling beneath the Interstate highway system to eliminate the need for long range batteries.

    3] Electric and autonomous vehicles, which will optimize roadway use, prevent accidents and fatalities, thus allowing for redeployment of law enforcement, eliminate insurance, eliminate multipoint pollution [eventually pollution altogether], increase demand for vehicles

    4] Development of new innovative modular rail that’s easy to install, autonomous, with extremely light cars [think airplane fuselage], kill the wheels, ride on air pucks or maglev, light cars make the elevated “rail” light & unobtrusive. DO NOT PUT a civil engineer in charge, get a guy whose worked the Auto & aircraft industries. A mechanism, not a concrete monument.

    * towable mooring platforms allow for a production line assembly, hold the fault lines.

    http://en.wikipedia.org/wiki/Liquid_fluoride_thorium_reactor

  27. someofparts permalink
    February 22, 2013

    This got my attention, from the 2/21 links at Naked Capitalism -

    http://econintersect.com/b2evolution/blog1.php/2013/02/21/steve-keen-using-kickstarter-to-fund-research

    I had been reading that, with impressive new capacities for handling epic amounts of data on increasingly portable little devices, the study of economics is on the verge of undergoing large changes. I wonder if Keen’s work is a step in that direction? I’m not sure how it would help folks in the neighborhood who are making local-scale changes, but it can’t hurt.

  28. someofparts permalink
    February 22, 2013

    “They can’t write, spell, or speak with any semblance of grammatical correctness. Also notable is a profound lack of curiosity.”

    Well Celsius, in my personal experience, those qualities actively disqualify a person for work these days.

    For that matter, while we’re on the topic, if you happened to have a decent job where those personal qualities are sought and valued, you will let me know won’t you?

  29. Celsius 233 permalink
    February 22, 2013

    @ someofparts;
    For that matter, while we’re on the topic, if you happened to have a decent job where those personal qualities are sought and valued, you will let me know won’t you?
    ~~~~~~~~~~~~~~~~~
    What do you consider “valued”? Is it a monetary figure? Here in S.E. Asia, these qualities are sought and valued; especially American English as opposed to British English, etc.
    ~~~~~~~~~~~~~~~~~~~~~~~~

    ~~~~~~~~~~~~~~~~~~~~~~~~
    By the way Ian, I may change my e-mail. Will that give me log in problems?

  30. stephen benson permalink
    February 23, 2013

    when i was a kid on the rez at school we got a “work ethic” pep talk from a baptist missionary who encouraged us to “pull yourselves up by your bootstraps.”

    a quick glance around the room showed me that most of us were barefoot.

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