Friday, 18 January 2013

Bob the Code-Builder

The story of the US programmer ("Bob") who outsourced his own job to a Chinese firm, so he could spend his day on social media, sounds too good to be true, so it probably isn't. Like all urban myths it depends on plausibility rather than probability. That the story originates with a company selling network security services, and that the embellishments are barely credible (such as the claim that he was simultaneously running the same scam at multiple companies and that he kept copies of the Chinese firm's invoices on his work computer), should be enough to prompt scepticism. The popularity of the story reflects our collective delight at the inversion of the natural order and the undertone of revenge (the script treatment brewing in Hollywood as we speak is probably entitled "Outsource this, sucka!")

Some commentators have treated the tale as a species of worker resistance, like the passivity of Bartleby the Scrivener, but this misses the crucial point that Bob was actually exceeding his employers expectations, apparently producing the best work in the building. As any programmer knows, outsourced code is usually riddled with errors due to a lack of tacit knowledge. Unless Bob was spending more of his time on quality assurance (i.e. reviewing and correcting the code) than watching cat videos, it's hard to see how such high quality could have been achieved (this obviously opens up the fairytale narrative of a coding genius somewhere in China who will now be plucked from obscurity and given a job at the Googleplex).

The ideological significance of the story concerns our assumption that Bob is not free to dispose of his labour. The firm can choose to outsource his job, so making Bob redundant, but he cannot unilaterally decide to sub-contract the work. This might appear natural in the case of a permanent employee, but in practice many programmers are contractors (the claim that Bob has a "relatively long tenure with the company" is statistically improbable in an industry where even perm jobs average only 2 to 3 years).

One of the distinguishing characteristics of a contractor, as distinct from a temporary worker subject to payroll taxes, is the principle of substitutability. A service provider is meant to be able to replace a specific worker, should they become unavailable due to illness or be rejected due to incompetence, in order to fulfil the contract. In reality, the service provider is a personal services company (PSC) with only one employee, so the substitute is provided by the staffing agency (it's a three-party contract) by means of another PSC. This fiction allows the worker to avail themselves of the tax advantages of a corporate entity, while the hiring company can avoid deemed employment liabilities (i.e. the rights of employees to paid holidays, parental leave and redundancy pay).

The privileging of business over workers, which includes the hybrid case of skilled workers acquiring the advantages of a business, is at the heart of the Tories' current difficulty over Europe. The fundamental split is between big capital and small capital, and their different strategies for growing business profits. Big capital is the champion of globalisation and the regulatory harmonisation that facilitates it. Small capital preaches free trade but is instinctively protectionist. It's the same division that underpinned the struggle over the Corn Laws, tariff reform and imperial preference. The emergence of UKIP, as small capital "ultras", is indicative of the current dominance of small capital within the Conservative party's ranks. The priority given by the party leadership to protecting the interests of the City of London indicates that big capital remains in charge.

The recent manifesto by the Fresh Start group of Tory MPs is typical of the compromise view: renegotiation rather than exit, combining a veto on financial services legislation and repatriation of powers over employment legislation. The latter is the key small capital demand. Small capital seeks to grow profit through wage repression, protection and rent-seeking. Dismantling employee rights, along with health and safety obligations, reduces costs and eases pressure on low-productivity businesses. Big capital seeks to grow profit through automation and more efficient supply chains (outsourcing and globalisation). It is more interested in the benefits of harmonisation and increased productivity, and knows it can offset higher social costs through tax avoidance.

The parable of Bob the code-builder is amusing because it shows a small capitalist hoodwinking a big capitalist by using the latter's techniques. Of course, Bob's initiative in becoming a small capitalist breaks an unwritten rule, which leads to his downfall. You cannot unilaterally transform yourself into a service provider. Economically an employee may be a type of commodity, but socially an employee is a type of serf. On that capital big and small agree.

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