[TriLUG] [OT] Lesson in global economics

[Stephen P. Schaefer]

This has to do with human values and politics, and little to do with 
technology.  You've been warned.

I start with a natural law principle: that all men are created equal. [I 
don't exclude anyone; don't allow PC obfuscations exclude you.]  I don't 
have any inherent right to a better income than a Romanian.  When free 
software makes us *all* richer, it is a Good Thing.  If I'm rich because 
a Romanian is poor, I should be ashamed.  It is my hope that free 
software will make the whole world richer; then someday they may be able 
to afford my services!

There are good reasons a client or employer might choose my services 
rather than a Romanian's:

* They might talk to me more easily.  Face to face.  In English as a 
first language.

* I may have better access to resources: it seems likely few Romainians, 
even programmers, will have broadband at home.  This might be the reason 
you're "cutting edge", and the Romanian's aren't.

* U.S.jurisdiction.  You're probably vaguely familiar with U.S. law, and 
know generally what to expect.  There may be unpleasant surprises with 
Romanian law, or the enforcement thereof.  U.S. law can certainly be an 
ass [vide Dickens (U.S. law derived on English common law)], but it's an 
ass you know.

All the above reasons apply more strongly to U.S. entities seeking 
services; less so to multinationals; they might be disincentives for a 
Romanian client.  U.S. programmers are at a distinct price disadvantage 
when competing internationally.  I wouldn't try it myself, unless there 
was a specific situation that amplified my advantages and mitigated my 
disadvantages.

My own specialization is system administration.  I lay hands on material 
stuff often enough that proximity is an important aspect of the value I 
bring to a job.  My attachment to the R.T.P. area is a plus for certain 
clients or employers, a detriment for others.  I wouldn't accept primary 
responsibility for Romanian systems unless I intended to move there.  I 
am still a programmer: a good sysadmin will automate, automate, automate!

With respect to the specific project you're discussing, you should find 
the pieces that only you can do, and find out what their value is for 
your customer.  That's the ceiling on what you can charge, regardless of 
the rate Romanian programmers get.  If there are Romanian programmers 
who can do all the work just as well, look for a different project.  If 
you do bring special abilities to the project, charge for those and farm 
the rest out to a Romanian partner -- perhaps looking for other work to 
do at the same time: you might spend a couple hours a day advising, with 
your Romanian partner doing most of the coding *if* the jobs can be 
split that way.

A riff on international economics: supply and demand used to be the 
subject of *micro*economics, because transportation costs removed all 
but the local community from consideration.  Hello, globalization.  I 
happen to ascribe to certain Judaic-Christian-European derived notions 
of natural law and justice.  I assert that these principals are 
universally attractive and that they constitute universal goods - not 
the good of Bill Gates, but the good of everyone.  I further assert that 
societies acting on those principals will prosper more than societies 
which do not.  And we are becoming a global society.  I am betrayed and 
impoverished by my government and by the corporations it governs when 
they collude in the maintenance of tyranny or injustice - anywhere on 
the planet.  I will not say that the U.S. has better or worse government 
than other countries - circumstances make them incommensurable.  But 
right and wrong apply to sufficiently specific instances, and we 
citizens of the U.S. have a lot that is wrong we need to make right - 
like the trashing of antitrust law and the whoring of elected officials 
- and a lot right we need to keep right - like our civil liberties.

     - Stephen

Mike M wrote:
> I am in discussions with a Romanian telecom operator.  I've failed in 
> previous attempts to close business with Romanians.  This time I decided to 
> learn something about software system economics in Eastern Europe.  I offered 
> to work at the same rate as a Romanian programmer. (Why not?  There's nothing 
> wrong with Romanian programmers. Their circumstances keep them from being on 
> the cutting edge of contrived technology.) Here is what I received:
> 
> "In Romania the average income is near 100 USD / month ... and for a good
> programmer I think is about 300$/month.  Please give me the estimation of the 
> effort and I will try to calculate it ."
> 
> I knew it would be low, but I never guessed it would be *that* low.  It 
> doesn't take a Chicago economist to figure the effect that lowered trade 
> barriers and fiber optics will have on first world economies.  There is going 
> to be a massive redistribution of wealth.  
> 
> Of course Linux and Open Source software are redistributing technological 
> wealth.  Is that a good thing?  Hopefully a philosophical argument will 
> ensue. :)  I see the argument from a frontline position.  My earning power 
> has been seriously impacted in the current economic climate.  Should I expect 
> to be earning 10-40 times more than Romanians?
> 
> I want to do the project the Romanians think they want:  an open source IMT 
> to PRI switch.  It probably has wide applications in the second world.  
> Anybody else interested?