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April 03, 2006
Remember the ALP promoting the idea that Australia should fully engage with the global economy and that while that might cause disruptions in the manufacturing sector, the way to deal with it was to raise skill levels and productivity through education and training.
That 'Knowledge Nation' approach was held to be the right answer for the early 1990s, whilst the human capital approach was deemed to be the right way to expand the economy, ensure the benefits of economic growth, and counter the economic inequality caused by the deregulated market open to the global economy.
That narrative still held with the loss of Australian manufacturing and service jobs to offshore sources--China and India, whether this was in-company (in-house) offshore or offshore outsource operations. Australians had to become cleverer, so they could do the design work in Australia whilst the manufacturing was done offshore using cheap labour. Globalization brings about both benefits and challenges.
It seems to me that this narrative needs to be revised. Why? It didn't make sense with PhD's in the humanities in the 1990s, many of whom ended up casual high school teaching or driving taxis rather than in cultural or intellectual production. And it appears that we need to accept that a lot of (middle class) people are going to be stuck in the lower part of the job market with the growing wage inequality. The middle class is being squeezed as the gap or polarization between higher and lower wage markets deepens. Computers, in complementing the non-routine (abstract) cognitive tasks of high-wage jobs, are also a direct substitute for the routine tasks found in many traditional middle-wage jobs.
The processes of globalization and computerization work to currently reinforce each other, in that they substitute for workers in middle class occupations.
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Peter Turchin warns in War and Peace and War that the increasing costs of education and the longer time required to complete post-graduate education is an example of intra-elite competition. He calls it a credentialling crisis.
In agrarian societies when the elite competed for resources (tax revenue from land rather than high-paying skilled jobs) it ended up in intra-elite warfare that culled the numbers of the elite until a more stable and egalatarian balance was achieved.