Trapped by Opportunity:
Phillip Brown, Hugh Lauder, and David Ashton,
The Global Auction
Amy Sue Bix and Taner Edis
Phillip Brown, Hugh Lauder, and David Ashton’s The Global Auction: The Broken Promises of Education, Jobs, and Incomes (New York: Oxford University Press, 2011. Pp. 208. $27.95) is a timely book, published amid heated debate about the potential collapse of the Euro and amid U.S. election-season wrangling about dismal unemployment statistics. Observers agonize about soaring college tuitions that burden students with rising debt, even as about half remain unemployed or underemployed during the first year after graduation. Internationally, popular movements have mounted protests against political unfairness, economic stress, and social imbalance. To avoid discussing such painful, controversial issues, many politicians and economic commentators offer assurances that Americans and Europeans can work their way out of recession as intensive education spurs innovation.
Puncturing such feel-good assurances that learning equals earning, social scientists Phillip Brown, Hugh Lauder, and David Ashton present the “inconvenient truth... that the opportunity bargain based on better education, better jobs, and better incomes can no longer deliver the American Dream” (p. vii). Drawing on interviews with international policymakers and business leaders, the authors argue that the world is undergoing “an economic power shift that threatens the foundations of prosperity and Social justice” (p. 3). They consider pundits like Thomas Friedman to be overly optimistic in suggesting that globalization empowers strong, intelligent go-getters from anywhere.1
Brown, Lauder, and Ashton challenge the assumption that technologically advanced Western countries can count on education, technology, and innovation to preserve their leading positions in the world economy. As they detail, human-capital theories of the 1960s stressed that knowledge could drive productivity, making education a sound investment for both individuals and governments. During the 1970s and ’80s, neo-colonial thinkers projected a clear divide between “head nations,” which generated innovation, and “body nations,” which manufactured tangible products. Observers assumed that while low labor costs might lure away factories, emerging economies could not compete for hosting knowledge-intensive operations. Hence, although American low-skill work was endangered, optimists expected that the brainpower of Western engineers, managers, consultants, and lawyers would attract high-powered, high-quality businesses. Authors like Daniel Bell and Peter Drucker predicted the rise of a postindustrial meritocracy, promising that knowledge workers would gain power as their intellectual resources became valued commodities. Those citizens left behind were, by definition, those unable or unwilling to capitalize on this opportunity bargain.
Few anticipated, this book suggests, the recent international higher education boom that has seen college enrollments doubling in just one decade. Arrangements with Western universities and companies like IBM, GM, Microsoft, Intel, and Pfizer helped create new pools of highly skilled labor available to work at lower wages, ready to handle challenges beyond customer-service calls and payroll processing. Companies seeking to reduce their labor costs no longer had to sacrifice quality and quickly realized the advantages of offshoring cutting-edge hybrid-vehicle and pharmaceutical research, software and microprocessor design, nanotechnology, shipping-container design, legal document review, and sophisticated financial analysis. In addition to saving money on demanding knowledge work, firms gained global flexibility to escape trouble spots. As long as networks of information technology linked operations across continents, dispersal of functions offered clear bottom-line benefits to those in control of today’s companies. The ability to shift all varieties of work beyond geographic limits gave corporations leverage to demand concessions from even highly educated American and European workers.
Brown, Lauder, and Ashton argue that in order to facilitate transfer of work to lower-wage locations, companies subdivided and routinized functions, then globally recombined them under a philosophy of “digital Taylorism” (p. 65). Standardized software captured some of the fundamental knowledge base, then walked lower-skill, lower-wage employees through each operation, under centralized control. A generation ago, observers had anticipated that twenty-first-century firms would need a creative workforce, enjoying the autonomy and initiative needed to satisfy consumer expectations for customization and continual improvement. Instead, corporate reengineering has meant that only 10–15 percent of professionals and managers receive “permission to think” (p. 81). The remaining technicians, managers, and “drones” (ibid.) are channeled into prepackaged routines, deprived of latitude concerning decisions such as approving bank loans. In assuming that top-layer staff produce much more value than everyone else, corporations now focus on recruiting, retaining, and disproportionately rewarding that elite, while all others wind up in “a reverse bidding war as companies try to reduce the cost of knowledge” (p. 97).
This high-pressure talent race makes companies unwilling to give promising trainees time to get up to speed. As a shortcut, firms court apparent superstars, chosen from a small set of elite schools across the globe. Such preselection reinforces the self-branding of corporations and universities as world-class, while denying otherwise potentially strong candidates opportunities to prove themselves. These biases “legitimate a new hierarchy of professional jobs based on a corporate power elite responsible for finding innovative ways of extracting value from the organization through labor arbitrage and digital Taylorism aligned with the short-term interests of shareholders” (ibid.).
Thus Brown, Lauder, and Ashton suggest that the stagnant paychecks, cancelled benefits, and employment insecurity of middle-class Americans and Europeans reflect systemic harms rather than temporary fallout from the financial crisis. Instead of increased scope for innovation producing a race to the top, one that Americans and Europeans assumed they would win, global economic competition spurred a race to the bottom, one with reduced wages and rewards for those locked out of elite positions. In such conditions, childrearing and education become an “opportunity trap” (p. 133), where families cheat or pour time, money, and energy into highstakes battles to reach prestigious schools, always operating at a disadvantage against economic and social elites who find it much easier to claim such desired positions. “We are being economically enslaved by our opportunities” (p. 141), they conclude, since even as students bear more expense in pursuing higher education, credential inflation erodes the competitive premium that degrees convey. “Today, opportunity, rather than being the glue that bonds the individual to society, has become the focus for intense social conflict. The blind faith in the market to deliver decent jobs to American workers has contributed to social congestion and a waste of social resources and human effort, as many compete for prizes that only a few can achieve” (p. 146).
Brown, Lauder, and Ashton call for the United States to embrace strategic industrial policymaking, systematically targeting investment toward vital areas of development—although in earlier chapters they had discounted hopes that the much-touted green economy could stimulate an abundance of high-paying jobs. The authors advocate restoring ideals of education as a pathway to cultivate curiosity and human strengths, rather than a quest for economic payoff. In somewhat contradictory fashion, they call for intensifying science and technology studies, even after noting an oversupply of STEM workers in the United States. After devoting nine chapters to detailing how corporations refuse to allow independent thought in workers, they write: “It will be the creativity, knowledge, and collaborative skills of people to dream up better solutions both inside and outside the box that will define a key role for education in the future, even if creative work is in limited demand” (p. 156). In contrast to earlier assertions that no special qualities destined the United States for permanent greatness, they assert that its open democratic society offers “social capacity for creative thinking [that will] be difficult to replicate” elsewhere (ibid.). They conclude by endorsing European-style retraining and income support for displaced workers, regulations to curb corporate stock-option abuse, and creation of multicountry minimum-wage laws and international labor organizing. They vaguely urge steps to address extreme income and wealth disparities, to reorient businesses toward long-term relationships nurtured through trust, and to acknowledge the role of care-giving labor, community builders, and all workers in promoting productivity.
For readers familiar with the latest literature on globalization and economic evolution, some ideas may sound familiar. Economists like Alan Blinder have estimated how many American employees might prove vulnerable to outsourcing, while Ron Hira has written about the offshoring of high-skill human resources in globally integrated enterprises.2
The Global Auction paints technology as a key factor in workforce and economic change, tracing the emergence and transformation of Taylorism and Fordism. The authors credit cell phones, secure networks, and software with helping poorer nations leapfrog from backward infrastructure to modern competitiveness, enabling and encouraging the offshoring of knowledge enterprises. In places, this perspective verges on technological determinism, portraying “the market” as an inevitable, impersonal force sweeping across the globe. In truth, wage stagnation and the winner-take all organization of businesses are due not just to international competition enabled by information technology, but also to the troubles of organized labor, America’s health-care stalemate, corporate political influence, and more. The authors’ thesis has many political implications, but they consistently downplay or overlook questions about political power.
The book acknowledges the uneven nature of development, where Indian slums coexist alongside advanced electronics factories, but say little about how globalization has actually changed politics, society, and everyday life in India, China, or elsewhere. Instead of often repeating the same observations about change, The Global Auction would have better served readers by offering more than its token hand wave to the political choices organizing economic life, education, and employment. By relying so heavily on interviews with business insiders, the authors fail to challenge Wall Street’s narrow definition of high-value talent or its assumption that a very small minority drives productivity. The book does not address vital consequences of the patterns it notes— specifically, the privatization of profit and externalization of costs, the perverse incentives that favor environmental degradation, and the sizeable wealth gap between different segments of societies.
It can be especially valuable to examine this book in connection with literature on recent trends in education, including standardization, demands for quantifiable assessment, declining public support for higher education, and managerial mentalities that parallel the business world.3The Global Auction offers a provocative assessment of the global economy, best when combined with insights from the history of technology, labor history, and the broad sweep of recent political, economic, and social history.
Amy Sue Bix is an associate professor in the Department of History at Iowa State University; Taner Edis is a professor of physics at Truman State University in Kirksville, Missouri.
Blinder, Alan. How Many U.S. Jobs Might Be Offshorable? Center for Economic Policy Studies Working Paper no. 142. Princeton, NJ: CEPS, 2007.
Friedman, Thomas. The World Is Flat: A Brief History of the Twenty-First Century. New York: Farrar, Straus and Giroux, 2007.
_______, and Michael Mandelbaum. That Used to Be Us: How America Fell Behind in the World It Invented and How We Can Come Back. New York: Farrar, Straus and Giroux, 2011.
Hill, Christopher T. “The Post-Scientific Society.” Issues in Science & Technology 24, no. 1 (2007): 78–84.
Newfield, Christopher. Unmaking the Public University: The Forty Year Assault on the Middle Class. Cambridge, MA: Harvard University Press, 2008.
Footnotes 1. Thomas Friedman, The World Is Flat; Friedman and Michael Mandelbaum, That Used to Be Us. 2. Alan Blinder, How Many U.S. Jobs Might Be Offshorable?; Ron Hira, “The Offshoring of Innovation.” 3. Christopher T. Hill, “The Post-Scientific Society”; Christopher Newfield, Unmaking the Public University.