So, the latest trend to hit the business magazines is falling programmer salaries. I can’t lay hands on the article just now, but it seems some CEO under pressure to outsource his programming to India had the bright idea of offering lower salaries (competitive with Indian levels, not U.S. levels) to programmers in the U.S. He got 90 applicants, even though the offer was for about half of what used to be considered normal for the positions.
A pointer to this article was posted to my favorite mailing list by a friend who is depressed about programmer salaries dropping, He wasn’t un-depressed by the revelation, at the end of the article, that said CEO ended up jacking some of his salaries back up to “normal” levels to keep his best people.
There are a bunch of ways I could respond to this. One is by arguing that outsourcing programming work is a fad that will largely reverse itself once the true, hidden costs start to become apparent. Even if that weren’t so, the Indian advantage would be temporary at best; as the Indian programmer’s value rises, so will the price he charges. I believe these things are true. But in keeping with tradition here at Armed and Dangerous, I’m going to skip the easy, soft arguments and cut straight to the most important and contentious one of all — falling salaries are good for you.
If you’re a programmer upset by falling programmer salaries, I hope you’re prepared to be equally gloomy about the continuing fall in real-dollar prices of all the other labor-intensive goods you buy. Because trust me, they get cheaper the exact same way — and somewhere out there, there are people who are pissed off and depressed because the market wouldn’t support their old salaries.
But each time this happens, more people gain than lose. The money programmers aren’t making is, ultimately, money some other consumer gets to keep and use for something else, because the price of the bundled goods programmmers were helping produce have dropped. The corporate cost-cutters only get to profit from this as a transient thing, until the next round of price wars. Lather, rinse, repeat.
The free market is a wonderful thing. I was going to call it the most marvellous instrument ever devised for making people wealthy and free, but that would be wrong — the free market isn’t a ‘device’ any more than love or gravity or sunshine are devices, it’s what you have naturally when nobody is using force to fuck things up.
Sometimes, when you and your friends are on the bad end of one of its efficiency-seeking changes, it’s hard to remember that the market is a wonderful thing for almost everybody almost all the time. But it’s worth remembering, just as it’s worth remembering that free speech is a wonderful thing even when it’s the Nazis or Communists exercising it.
Why is this? Because the alternatives to free speech, even when the people pushing them mean well, always turn into petty tyrannies now and become grand tyrannies in the course of time. The alternatives to markets decay into tyranny a lot faster.