IBM - A U.S. Grown Company Wiping Out U.S. Jobs While Taxpayers Pay for Its Goods & Services

Through disinvestment in the U.S. economy and investment in developing economies such as Brazil, India, and China (BRIC), the global, capitalist elite is hollowing out the U.S. economy.  Jobs – even high skilled, high paying jobs – are leaving the U.S. for cheap BRIC labor markets.  Worse yet, global oligarchs are beginning to treat the U.S. like a colony. 

Consider IBM’s current outsourcing of jobs – just one example of this colonizing tendency.  IBM, a company conceived and grown in the U.S. into a multinational, corporate behemoth, employs 400,000 people world-wide with 105,000 left in the U.S.  IBM has reduced its U.S. payroll by 30,000 since 2003.  Conversely, since 2003 it has grown its skilled labor force in India from 9,000 workers to 75,000 (see New York Times Business, Tuesday, October 20, 2010, page B3).  This is the “hollowing out” part of the equation.

The colonizing part involves the purchase of IBM products by American public universities and state and federal government.  Approximately one year ago, IBM purchased SPSS, a company providing statistical software to colleges and universities as well as to state and federal governments.  In higher education SPSS™ is available on a site license for use by faculty and staff.  Kansas University alone pays approximately $100,000 per year for a site license.  Students who often need it or are required to use it for research and course work must purchase a student version for approximately $200. 

Much like SAS™, another statistical package spun out of an American university, SPSS grew into a highly profitable corporation, headquartered in Chicago, with a large, highly skilled workforce of statisticians, programmers, and sales people.  I know this because I have been working with and teaching SPSS™ for several decades.  On several occasions I visited the SPSS corporate offices for training and other business purposes and saw several floors of a high rise office building on the Miracle Mile occupied by SPSS employees.  They will be gone soon.

The question becomes, “To what extent will government purchase goods and services developed with U.S. ingenuity and resources but manufactured by cheap labor in developing economies?”  The state taxes used to purchase these products are, to a large degree, regressive sales taxes collected on food, clothing and other necessities of life.  No matter how poor we become, a large share of our income will be diverted to state and local taxes.  At the same time, opportunities for a living wage will continue to shrink.

The current economic malaise is not temporary.  The suppression of U.S. wages and increasing unemployment are not due to a historical cycle of economic expansion and retrenchment.  The U.S. economic system has been undergoing restructuring for decades.  In the 1970s, the share of national income going to the top 1% hit a floor of 8%.  Since the beginning of the Reagan Administration the share of income going to the top 1% has risen to 23% – the same level it reached immediately preceding the Great Depression (see Robert Reich’s recent book Aftershock, pp. 19-21). 

One cause of this redistribution/maldistribution of wealth can be laid at the door step of the U.S. Congress.  Just three decades ago, state and local sales taxes combined rarely exceeded 2%.  As capital gains, inheritance, and progressive income taxes have been slashed over this period of time, regressive sales taxes have risen in most locales to 8, 9, and even 10%.  Conservative fiscal policy, which mostly benefits the upper income tier of the U.S., has resulted in a diminishing amount of federal dollars going to state and local governments for public assistance, Medicaid, and other programs, which inject money into state and local economies.

Colonialism, as I am using it in this post, simply means that a society’s resources are exploited by outside forces that have no interest in the well-being of the exploited society and its people.  Colonizers in this sense take but give nothing back.  Governance is also manipulated and controlled by the colonizer, which, in the case of the U.S. economy, is the network of global capitalists.  For instance, through the U.S. Chamber of Commerce and the National Association of Manufacturers, global elites, given carte blanch by the U.S. Supreme Court in the Citizens United case, are funneling hundreds of millions of dollars into the 2010 elections.


  1. I think this is an excellent article — well documented, well-written and dealing with a very important subject!! I wish this message could be distributed to a wide-ranging audience — an audience that receives almost no information on the fundamental sources which are causing their very difficult situations derive.

  2. Spot-on! Bravo. This is precisely the problem that Americans are feeling tapping them on the pockets everyday. This “economic crisis” is not the fault of middle-America, as we are told in order to acclimate us to the austerity policies that the globalist-elite intend to ram through government with their control of various “think-tanks” and campaign funding (see the tallgrass article on the Cato Institute).Nor is it a mere side-effect of our “consumer culture”. It is the CAUSE OF IT!! The economic meltdown threatening the security of the world is nothing less than a by-product of the systematic tear-down by corporate oligarchists of the United States economy and the deliberate corruption of its political institutions. For years, as our monetary GDP “grew” our physical productive output shrank and our hard-built infrastructure crumbled away. All the signs of this crisis were right in front of our eyes as household incomes fell far behind inflation, the number of un-and-under-employed skyrocketed, and our public infrastructure went from a priority to an economic “burden” under an increasingly un-American policy direction. Economists, who we now see should have been institutionalized or even jailed, were celebrated as geniuses for introducing financial instruments that allowed for an accelerated (and unconstitutional)explosion of financial power that, with the aid of “think-tank” directed de-regulation, allowed corporations to use their new financial “muscle” to blitz the globe in an East-India Company style revival of mercantilist, “free-trade” imperialism. All this while gutting the American economy and changing the face of the United States around the globe. Now the same “free market” enthusiasts ask that we lower our living standards AND foot the bill to “fight the terrorism” this kind of economic practice breeds. Enough! It’s time we look back to Hamilton, Lincoln, Carey, and even FDR, who already fought this EXACT SAME FIGHT for us! Within these historical examples we can find real, concrete answers, rather than continuing to trust that anyone going on about “freedom” and “liberty” means something good.

    • Thanks for the comment. You are right, the capitalist elite has been traveling the globe colonizing populations for centuries. Currently, the Corporate elite has a well organized, well funded “infostructure” for continuing subjugation of the population. The current supreme court also supports this elite as the outcome of a social darwinist process in which the richest and most powerful are at the top as a natural inevitability. Hence, we now have the Citizens United case that allows the Chamber of Commerce to act as a proxy for massive corporations and billionaires in their total take over of the governance of the U.S.

      Citizens seem to be very placid and compliant in the face of what is happening to them. Everyone should see the movie “Never Let Me Go.” The children and young adults were conditioned from childhood to accept their fate, which was to donate their organs until they “completed” in their 30s. This is a great metaphor for what is happening today. Everyone should see it.