A perverse hypocrisy

Suketu Mehta provides his take on the outsourcing debate in Tuesday’s New York Times:

The outsourcing debate seems to have mutated into a contest between the country of my birth and the country of my nationality. Of course I feel a loyalty to America: it gave my parents a new life and my sons were born here. I have a vested interest in seeing America prosper. But I am here because the country of my ancestors didn’t understand the changing world; it couldn’t change its technology and its philosophy and its notions of social mobility fast enough to fight off the European colonists, who won not so much with the might of advanced weaponry as with the clear logical philosophy of the Enlightenment. Their systems of thinking conquered our own. So, since independence, Indians have had to learn; we have had to slog for long hours in the classroom while the children of other countries went out to play.

When I moved to Queens, in New York City, at the age of 14, I found myself, for the first time in my life, considered good at math. In Bombay, math was my worst subject, and I regularly found my place near the bottom of the class rankings in that rigorous subject. But in my American school, so low were their standards that I was – to my parents’ disbelief – near the top of the class. It was the same in English and, unexpectedly, in American history, for my school in Bombay included a detailed study of the American Revolution. My American school curriculum had, of course, almost nothing on the subcontinent’s freedom struggle. I was mercilessly bullied during the 1979-80 hostage crisis, because my classmates couldn’t tell the difference between Iran and India. If I were now to move with my family to India, my children – who go to one of the best private schools in New York – would have to take remedial math and science courses to get into a good school in Bombay.

Outsourcing is sure to be an issue in the midterm elections next year, even more so than the last Presidential election. The Democrats shamelessly pander to their base while the Republicans avoid the issue like the plague. Nobody bothers to admit that fixing our education system is the best way to prevent the “problem” in the first place. Mehta describes that the “logical philosophy of the Enlightenment” that allowed Europeans to dominate in the first place is now being ignored by them. He beautifully points out that turnabout is only fair:

There is a perverse hypocrisy about the whole jobs debate, especially in Europe. The colonial powers invaded countries like India and China, pillaged them of their treasures and commodities and made sure their industries weren’t allowed to develop, so they would stay impoverished and unable to compete. Then the imperialists complained when the destitute people of the former colonies came to their shores to clean their toilets and dig their sewers; they complained when later generations came to earn high wages as doctors and engineers; and now they’re complaining when their jobs are being lost to children of the empire who are working harder than they are. My grandfather was once confronted by an elderly Englishman in a London park who asked, “Why are you here?” My grandfather responded, “We are the creditors.” We are here because you were there.

34 thoughts on “A perverse hypocrisy

  1. Nobody bothers to admit that fixing our education system is the best way to prevent the “problem” in the first place.

    This is argument is very en vogue, but it doesn’t really address the situation for the 60-80% of the population that’s not in the talented tenth or prevented from working in some way (or to put it in Chris Rock’s words, “we’re a nation of B and C students”). Education is almost always good (and a popular culture and news media that didn’t suck the intelligence out of people would be even better), but not everyone is going to be able to achieve the highest positions in society. More political power for workers in relation to their jobs (i.e. more organizing, more unionization, and more democratic unions) is a more practical and to-the-point solution. I used to think that was pandering (and a lot of the outsource rhetoric is, even though it points to a legitimate underlying problem), esp. because there will be sentiments along the lines of the “Jersey Guys” but it’s really just democracy, I think. There hasn’t been a political party that’s really stood up for American working class (of all colors) in at least 13 years, and some of the labor unions are in revolt (in part) because AFL leadership has focused so much energy on political victories and so little on new organizing.

    At the end of the day, the best solution for people who feel that they’re being discriminated against, or unfairly deprived of resources, or whatever, is to band together.

  2. A basic understanding of international trade will help americans and indians better understand the outsourcing debate and its inexorable nature. David Friedman once urged americans to view japan as a giant mysterious factory that took in crop from Iowa and beef from elsewhere in the states and turned it into cars. The idea is that if you attempt to block the entry of Japanese cars, you are hurting the Iowa carmakers,the farmers who send their produce to Japan. Outsourcing is one aspect of international trade. India is a mysterious black-box that is now greedily feeding on all things american and spitting out reams of code. This is obviously a gross simplification, but it is better to start with pithy parables before you dive into the nuances.

  3. To understand why this debate is so polarised, one needs to understand what has been termed American Exceptionalism: “the idea that the United States and the American people hold a special place in the world, by offering opportunity and hope for humanity, derived from a unique balance of public and private interests governed by constitutional ideals that are focused on personal and economic freedom” (http://en.wikipedia.org/wiki/American_Exceptionalism).

    Tied to this is the fact that for the first time, a large number of regular folk are confronting the reality that they might have to move to another country to find a better job and life (this is a specter for now, but one extreme of the outsourcing shouting matches does bear this out). Perhaps for the first time, Americans are being told that there are other lands who might be just as competitive as they are in the high-tech sector, that like the immigrants they’ve encountered all these years, they too have to be mobile to keep up. Mobility (and the resistance to it) – lies at the heart of these outsourcing debates.

  4. 1970s: A goddamn computer took my job! 2000s: A goddamn brown man took my job!

    ain’t nothin new, and no politician gives a damn about the common man, otherwise labor unions would still have some clout here.

  5. A lot of companies are outsourcing to Northern Ireland, Southern Ireland,England, Australia, Israel, South Africa, Czech Republic, Poland, Hungary and Russia. So how come the Americans only complain about the outsourcing to brown countries?

    Ironically, it appears that some Indian IT companies are starting to outsource to China, Australia and other countries.

  6. the best solution for people who feel that they’re being discriminated against, or unfairly deprived of resources, or whatever, is to band together.

    You may add: form unions, organize strikes, indulge in union politics, further anti-capitalism… and at last become Communists!

    Band together? for what? – Not let rest of the world progress?

  7. Very surprised that the NYT allowed the “perverse hypocrisy” piece to be published. Although this may be because Mehta beats up on European colonialism, but neglects to mention how the proceeds of colonialism gave America its start. To correct this small oversight by Mehta, I cite just a sampling of the benefits to America: – The great grandfather & grandfather of Senator John “Forbes” Kerry were american ship owners who made huge profits delivering opium grown in india by the British. – the money earned from India was used by Robert Bennett Forbes (Kerry’s great grandfather) to launch Russell and Company, a shipping empire which was later instrumental in the development and endowment of Yale University. Yale’s Skull and Bones society was founded by William H. Russell, one of the members of the wealthy Russell family, in 1832. Both John Kerry & George Bush were members of Yale’s Skull and Bones society. – After the Opium War, the Forbes family cashed out their Indian fortune and reinvested it in Europe and the United States. Some of the population growth of Chicago and Midwestern Plains states in the middle to late 19th century was due to John Murray Forbes’ railroad projects in Michigan and Chicago. The Chicago, Burlington & Quincy Railroad Co., from Chicago west to the Pacific was built by John Murray Forbes. – In 1879, William Forbes, son of John Murray Forbes, used the family fortune to financially back Alexander Graham Bell’s telephone company, and become president of the company, then known as Bell Telephone, today’s AT&T. – Cameron Forbes used his wealth to become Governor General of the Philippines. His niece Ruth Forbes Paine Young tapped her Forbes family inheritance to finance the International Peace Academy (which has hired former Indian army officers as advisors). Her husband invented the Bell Helicopter used in the Korean and Vietnam Wars. – Many Forbes family members purchased estates in France and Massachusetts (i.e. Martha’s Vineyard etc), and generally remain extremely influential there, in local or national politics. – John Forbes Kerry is a U.S. Senator and was a candidate for President of the U.S. and is a beneficiary of several Forbes family trusts (c. 2002) held in offshore locations (talk about outsourcing!) – Kerry’s first cousin and close friend, Brice Lalonde, an environmentalist activist, is a French Green party politician who was a candidate for President of France in 1981 and currently mayor of Saint-Briac-sur-Mer near the Forbes family estate

  8. Band together? for what? – Not let rest of the world progress?

    Yah man Hammer, sock it to Saurav for spreading all this tribal collectivist nonsense that has impeded progress in most countries

    Comrade Saurav, please read the following link (pdf at bottom) – Folk Economics – to understand why your zero-sum, wealth distribution theories are counterproductive. Much like the other pernicious tribal vestige — religion, collectivistism has to be overcome …

  9. My take!!!!

    People are going to comment all they can. Some smart ones take facts from history, intersperse it with some comments of their own and then try to make a point. It is a good strategy. For one, u can always defend urself by the “facts” ( cleverly forgetting that u used some paint on it). So Mr. Suketu Mehta is no exception. He has tried to use some facts of history.

    The logic behind outsourcing or rather allowing outsourcing is a concept called “opportunity cost”. Students of economics would know that. Essentially as a nation( and its policy makers) you figure out what is the opportunity cost associated with say producing an X quantity of good vs importing that same quantity. That IS the driver of all trade policies. Closely tied in is the “strength of your currency”.

    However as is human wont, politicians(BTW we always blame them first, huh?), people(you and me), interest groups will continue to look at things the way it suits them. It is tragic however when you broadcast what you feel and porject it as the “essential truth”.

  10. Unions provide only one thing.. They are supposed to provide only one thing..bargaining power. How much will a walmart employee make due to unions-from $5.50/hr to $25.00/hr ? Ofcourse not and hence Union is not the answer. (I assume it is needless to say why he will not make $25.00/hr)

    That being said, it is absolutely absurd+1 to say that the concept of union is responsible for the state of affairs of many countries. Walmart does economies of scale and it is perfectly alright. Someone uses the similar economic concept thing with labor and it is not correct. Why?

    Power has been traditionally abused by the the union leaders and hence the backlash towards unions by all and sundry

    It will help to differentiate between human error and system error.

  11. Overall, not a bad column. But if I were to nitpick on a couple of items:

    “It’s not by choice; it’s because they’re still struggling to stand on their feet after 200 years of colonial rule.”

    An incomplete diagnosis – the 40+ years of socialism made a bad situation even worse. India’s vibrant tech sector owes its current fortunes to the government staying out of it. Everything else the government gets involved in, from manufacturing to airlines, suffers a reverse-Midas touch – it’s junk.

    “Just as Arab-Americans can help us fight Al Qaeda, Indian-Americans can help us deal with the emerging economic superpower that is India.”

    A naïve idea. Arab-Americans have been in the U.S. for several generations now, and the Christian ones have only distant linkages with the Middle East. An Arab-American resteraunteur, doctor, or accountant is of little value in fighting Al Qaeda. Indeed, it’s likely that Al Qaeda will view Arab Americans as traitors, for adopting a Western lifestyle.

    How much help Indian-Americans can give is a bit trickier. For one, IAÂ’s focus on different things. IA businessmen will focus on improving economic ties, while NGOÂ’s will want great attention on improving IndiaÂ’s poor social indicators, such as female education and widespread child malnourishment.

    “And just in case, I’m making sure my children learn Hindi.”

    Considering that the lionÂ’s share of IndiaÂ’s economic reform is taking place in the south, he might be better off teaching them a south Indian language.

  12. my theory goes:

    what increased power for workers in the US would do (probably through growing, powerful, democratic unions, but it could happen other ways, I guess) is increase bargaining power for workers at places like Wal-Mart (as they used to have…union membership is at a low point in the United States–e.g. not a single Wal-mart is unionized). As a widespread phenomenon, this would improve workers lives–for example, they might have things like health care, higher wages, etc. They would also be able to make sure that when their jobs go overseas, they get concessions so that they can survive that go above and beyond ridiculous claims that job retraining can turn lifelong garment workers into IT professionals. Finally, because of the increased clout of their instiuttions, they would have more political power and restore a greater sense of balance to American politics. This would help stop Republicans from deflecting economic issues into racism, homophobia, sexism, and other “moral values” claims, and would therefore be better for everyone disempowered (and would ideally be part of a broader social justice movement). The culture of that broader movement would be more likely to support things like democracy (the real kind, not the Bush-in-Iraq kind) in other places. As a small example, you might notice that union voters tended to be more likely to vote against Bush than nonunion members in the most recent Presidential election.

    If the situation were that large, overpowerful, corrupt unions (i.e. the way the business lobby is today) were shutting down New York and Los Angeles everyday in bandhs and calling general strikes every once in a while about issues of nonimport, I might have different feelings about them. But that’s not the situation; the sorry state of workers rights (and particularly immigrant workers rights) in the U.S. makes it almost impossible to ignore that this is a huge problem and all the other things happening (homophobia, racism, etc.) make it clear that someone will exploit these issues to sow dissension if people don’t address bread and butter issues for what they’re about.

    p.s. babloo and hammer_sickel, it would do you good to brush up on contemporary American politics before red-baiting people. The day that “anti-capitalism” becomes a force in the United States is pretty far off, if it’s to happen at all.

  13. tilo, I haven’t read that book, but was curious about it after i read this write-up. Is it worth a read? It seemed like it might provide a different perspective on “The Immigrant Experience” than the typical glossy, mehendi-on-the-cover book.

  14. The day that “anti-capitalism” becomes a force in the United States is pretty far off, if it’s to happen at all.

    I know its a far streched statement (but that is your goal?). Such slurs, however, are not uncommon when Democrats decry outsourcing as a devil for America and inches closer towards ‘anti-caps’. (btw, its the only issue I dont agree on with dems).

    this would improve workers lives–for example, they might have things like health care, higher wages, etc.

    Dont you think high school/college education would help make people aware of their rights rather than pre-conditionally rely on unions? Unions usually are very prone to competitor/enemy/political influence – hence avoided by businesses.

    Plus much of America’s lowest income working class is immigrant. And I am sure they would feel less exploited/more opportunities here than where they hail from.

    Health care, higher wages – Repubs need to work on that! (I however dont think Dems would have changed much here either viz. higher wages but more taxes).

  15. As a widespread phenomenon, this would improve workers lives–for example, they might have things like health care, higher wages, etc.

    Corporations are subject to normal market forces, they can only support ‘fair’ health care and wages. Ganging up in unions and descending like a pack of wolves picking clean the corporation does no one any good in the long run. Witness the US auto companies and unionized airlines – all totering on the edge of bankruptcy. Why? unjustified union health cares and wages. All these companies have to reduce substantial committments otherwise they will have to file for bankruptcy. In bankrupt companies, all the workers lose their jobs and get pretty much didly squat. How does this help?

    They would also be able to make sure that when their jobs go overseas, they get concessions so that they can survive that go above and beyond ridiculous claims that job retraining can turn lifelong garment workers into IT professionals

    How is jobs going overseas different from garment workers in New England losing jobs to people in Georgia (with much lower wages) during early 20th century. People in new england got better skills and moved on to prosper. Job mobility of this kind is what makes US the engine of growth for the world – capital from all over the world comes here. Anyways, companies do compensate ‘fairly’ in case of such retrenchment. Again, ganging up and killing the corporation ‘golden goose’ in the name of concessions does no one any good. Corporations pay taxes you know, it is up to the govt to manage social welfare effectively.

    This would help stop Republicans from deflecting economic issues into racism, homophobia, sexism, and other “moral values” claims, and would therefore be better for everyone disempowered (and would ideally be part of a broader social justice movement).

    Hmm..this is a valid point. However, if the social issues are your real problem why do you recycle failed economic chestnuts from FDR circa 1931, instead of thinking something novel. You loose credibility in your social agenda because no one can believe you have thought through the issues carefully. Could it be the democrats have become corrupt and idea-less even when they see that something is necessary to be done; they lack the energy to do it and don’t have the virtue enough to sacrifice ease and pleasures in the attempt? Hence we have the spectacle of multi-millionares like Kerry, Edwards et al. demagogue about ‘minimum wage’, ‘Benedict Arnolds’, ’empowerment’ etc.

    p.s. babloo and hammer_sickel, it would do you good to brush up on contemporary American politics before red-baiting people.

    Sure, however I suspect people recycling depression-era economic policies won’t help me or hammer.

  16. Couldn’t resist updating anangbhai’s postulation:

    1970s: A goddamn computer took my job! 1990s: A goddamn brown man took my job! 2000s: A goddamn brown man with a godamn computer took my job!

  17. hammer_sickel and Babloo, thanks for actually engaging the substance of my points (truly).

    Corporations are subject to normal market forces, they can only support ‘fair’ health care and wages. Ganging up in unions and descending like a pack of wolves picking clean the corporation does no one any good in the long run.

    The picture you describe is so far from the empirical reality. Union membership in the United States is 12.5% of the workforce (as compared to 20% in 1980 something–go look at the link above). Wal-Mart, the largest private sector employer in the country, has not a single unionized store or distribution center to my knowledge (and it’s the model for retail nowadays). Large swathes of working people–from agricultural workers to undocumented grocery store employees–are in practice not only unable to benefit from labor rights (see Hoffman Plastics), but they are pitted against citizens to drive down wages (and hence you get xenophobia). The federal government has been enacting legislation on behalf of energy companies, credit card companies, insurance and banking companies at such a rate that it’s hard to keep up. The President, and both hosues of Congress are dominated by a pro-business party that cares so little about labor rights that they actively attempst to undermine workers’ rights even in the context of national security (see the debate about the DHS and why their employees are nonunionized, as opposed to every other federal department). And the Supreme Court is going to institutionally be set up to be even more pro-business for the next few decades. So the issue of unions picking corporations clean is not really that high up on my list of concerns for society right now because of the context in which we live today.

    I’m not in a position to argue about the airline industry or auto companies, although i would hardly be surprised if low-budget competition + higher oil prices + september 11 attacks failed to offset the billions in subsidies the airlines got–maybe someone with greater knowledge of United’s pension plan issues (which is what you’re referring to, I assume) can shed some more light on this. i don’t know about auto companies, but generally speaking (for the reasons described above), american unions are not militant enough to pick companies dry–we leave that to the ceos, who have no vested interested in the continued survival of the company–as opposed to the workers, who do.

    How is jobs going overseas different from garment workers in New England losing jobs to people in Georgia (with much lower wages) during early 20th century. People in new england got better skills and moved on to prosper.

    That’s a very sunny description of what happened in New England (and I would add other places) for which you’re going to have to offer a little more evidence to offset my personal experience with New Haven, CT and what I’ve heard and seen of places like Detroit, MI; Flint, MI (go see Roger And Me); Brideport, CT; Buffalo, NY; etc.

    In any case, there may not be a difference in terms of the economic processes at work, but in terms of the context in which it’s happening, there’s a huge difference. You’re basically deindustrializing the entire United States on the basis of “competetive advantage” theory (in the words of a pro-business friend of mine in India) and sending that industry to the chief geopolitical rivals of the United States in the next 30-40-50 years. That’s obviously a little different, whatever your opinion about it, than jobs going from New England to the South.

    why do you recycle failed economic chestnuts from FDR circa 1931, instead of thinking something novel

    I didn’t realize advocating worker organizing as part of a broader social movement in the context of 2005 to bring White (and other) working class people in alliance with other disempowered groups to combat both the Republican right’s exploitation and renegotiate class vs. identity issues on among disempowered people while strengthening each side was a Depression-era economic policy.

    Just because you support worker organizing, that doesn’t mean you don’t support workers having a place to work. Every single place I’ve ever worked (almost all non-profits) has been nonunionized, and, with the exception of maybe one place, could have benefited from a union–both from the standpoint of employee morale, from more effective functioning of the organization, etc. It would obviously have benefited the workers and it probably would have improved productivity.

    The best way to understand why you need worker organizing (in and of itself…setting aside the clear political benefits of it in present-day context) is as a question of leverage/negotiating power. You can’t really have a functioning democracy in the US today if all you have are profit relationships and political parties and there are no civic institutions that are there to organize people to help them deal with social problems–whether churches, or labor unions, or tenant unions or whatever. Those are the institutions that could create political power for people, not political parties (which serve their own ends, by and large, and the ends of the politicians inside them).

    So it’s a little more complex, eh comrades?

  18. Detroit, MI; Flint, MI (go see Roger And Me); Brideport, CT; Buffalo, NY; etc. You’re basically deindustrializing the entire United States on the basis of “competetive advantage” theory (in the words of a pro-business friend of mine in India) and sending that industry to the chief geopolitical rivals of the United States in the next 30-40-50 years.

    Not true. Foreign car companies (Japanese, German, Korean) are all over the place building new car factories since the worker mobility and business friendly laws make it easier to operate here. That, and they are not saddled by health care and other union benefits that hang around US auto companies. Also, most outsourcing is in the low-end jobs. If you, your son and great grandsons keep making garments till kingdom come, who will invent computers?. I would rather have silicon valley than garment valley. Using Michael Moore to promote any discussion totally undermines your point. It is like quoting Ann Coulter in discussions, not to mention retardation caused by exposure to his partisan fantasies.

    Just because you support worker organizing, that doesn’t mean you don’t support workers having a place to work. Every single place I’ve ever worked (almost all non-profits) has been nonunionized, and, with the exception of maybe one place, could have benefited from a union–both from the standpoint of employee morale, from more effective functioning of the organization, etc. It would obviously have benefited the workers and it probably would have improved productivity.

    ‘Probably’ improved things indeed. Results speak for themselves. Unionization across the globe has led to sub-optimal business performance (socialist world, communist world), the US is much better for reducing unionization. We cannot let this virus come back again. Death to unions!

    You can’t really have a functioning democracy in the US today if all you have are profit relationships and political parties and there are no civic institutions that are there to organize people to help them deal with social problems

    Gee, I guess until unions came along the US was not a democracy. So paying taxes in not enough? Why isn’t that enough to create civic organizations? Why do you need to poke into the functioning of the corporation till it becomes weak and dies. The corporation has some simple things to do – make money, respect the law. Why does it need to be bullied to pay up the union mafia? This is a guarenteed downward spiral for the corporation since every new generation of union leaders feels obligated to extract more than the earlier and slowly drive the corporation to the ground. If they don’t get concessions it is back to the standard – CEOs are pigs, class struggle nonsense. No corporations no jobs.

    whether churches, or labor unions, or tenant unions or whatever

    Not the same analogy, a church exists outside of the corporation. Today there are many opportuntiies for people, you don’t like this company join another. You don’t like what you are doing, upgrade your skills and do something else. Nobody is holding a gun to your head. Companies come and go, learn to live with it. The govt collects taxes, these can be used for short term rehabilitation. Unless you are lazy, in which case don’t blame the company for not wiping your ass.

    …working class people in alliance with other disempowered groups to combat both the Republican right’s exploitation and renegotiate class vs. identity issues on among disempowered people while strengthening each side was a Depression-era economic policy.

    Groan. Still peddling discredited marxist class struggle theories. Please join a profit making company and you will be saved (that and don’t watch Michael Moore).

  19. Comrade Babloo, you’re obviously committed to arguing that all I believe in is unions that are perversely bent on destroying companies, that the kinds of unions you’ve seen are the only kind that exist, that what you think you’ve seen applies universally, that what you believe applies universally trumps my personal experience, and that anyone who advocates for worker organizing of any kind is relying on “marxist class struggle theories.” And there’s nothing that I can do to change your mind.

    It’s troubling that you’re this uneducated about what organizing is and why people do it. Go read this and this and get back to me.

  20. Unions do serve a purpose, and that purpose is served when their members’ working conditions are harmful and dangerous.

    In America, such conditions are not as widespread as they once were. Andolan is the exception rather than the rule.

    Airline pilot’s unions, auto workers unions, grocery store cashier unions – all of these have outlived their usefulness and devolved into beureacracies whose leaders’ greed and appetites for power mirror many superstar CEOs.

  21. that what you think you’ve seen applies universally, that what you believe applies universally trumps my personal experience

    Saurav. Saurav, Saurav, you don’t even– you’re glib. You don’t even know what unions are. If you start talking about exploitation you have to evaluate and read the research papers on how they came up with these theories, Saurav, okay. That’s what I’ve done. Then you go and you say where’s– where’s the proof? Where’s the statistics that says how much union you’re supposed to get?

    ps. katie says hi and death to unions, peace

  22. Regardless of what one thinks about the outsourcing issue, I can’t believe the writer said something this incredibly stupid–

    “But we have a resource of incalculable worth right here to help us compete: the immigrants who’ve been given a new life in America. There are many more Indians in the United States than there are Americans in India. Indian-Americans will help America understand India, trade with it to our mutual benefit. Just as Arab-Americans can help us fight Al Qaeda, Indian-Americans can help us deal with the emerging economic superpower that is India. This is the return of the gift of citizenship.”

    That is the most idiotic thing I have ever heard, not to mention HARMFUL TO INDIAN-AMERICANS. Outsourcing is an issue tied into the entire global economy that effects everyone. To suggest that Indian-Americans are more important than anyone else here is ridiculous, and it also casts an uncomfortable spotlight on them as if it’s somehow their and only their responsiblity to deal with outsourcing. Please Mr. Mehta, shut up!

  23. Whew! This entire outsourcing “controversy” is so much hype…

    The actual impact is actually insignificant in macro terms.

    1) First of all, unemployment for computer industry professionals here has just hit a four-year low in the US

    “And it’s a really low, low. Last week, my colleagues Eric Chabrow and Marianne Kolbasuk McGee reported that unemployment among IT workers averaged 3.7% for the four quarters ended March 31”

    http://www.stringinfo.com/pkblog/archives/002720.html

    2) Secondly, India’s total exports of white-collar services to the US is approx $10 billion, employing about 700,000 people.

    White-collar services include everything — IT services, call-centers, specialized business-process outsourcing.. the whole shibang!

    Let’s put that $10 billion in some perspective

    — The US’s GDP is approx $12 trillion. So, India’s share of this is less than 0.1%.

    — Total employment in the US is 140 million

    Journalists are making the same mistake they did during the Internet era, by confusing anecdotes for facts and data. Internet commerce in 2005, after almost a decade of 30% growth is still less than 2% of total retail sales!

    Similarly, there’s absolutely no way outsourcing to India will have anything more than a peripheral impact on the US economy.

    American alarmists and protectionists are better off finding a new voodoo doll.

    And Indian triumphalists can stop their chest-thumping — we’re no IT superpower ($15 billion out of a market of $800 billion+ means we’ve got a long way to go!)

    And enough of this tripe about the Indian educational system being so great! That’s absolute nonsense! A very, very tiny percentage of schools and colleges are even half-way decent. Otherwise, the rest are terrible.

    After all, India’s literacy rate is lower than many countries in sub-Saharan Africa!

    http://www.deeshaa.org/who-actually-paid-for-my-education/

    Full disclsoure: I run an outsourcing firm focused on the mortgage industry, and think I know a thing or two about outsourcing.

    Suketu’s closing note about having his kids learn Hindi because of better prospects in India = a cute close, but absolutely irrelevant. Your prospects in India improve by learning English — not just in outsourcing but even in domestic industry/ business. Even in Delhi and Bombay, English is sine qua non. And of course, the Southern states (Karnataka, TN and AP) which contribute 60% of the outsourcing exports loathe Hindi — in varying degrees

  24. Suketu’s article, much like his book, though entertaining, is about dramatization before content:

    Why are Indians willing to write code for a tenth of what Americans make for the same work?

    Anyone that’s tried to get decent work done in India knows that this statistic is pure fiction.

  25. Unfortunately, Prashant Kothari misses some key points

    1. India’s services exports to rich countries like the U.S. total $51.3bn & grew at 105% in ’05. Besides IT & ITES, services include communication, construction, financial, news agencies, royalty, copyright, license fee and management services, tourism, transportation and insurance service exports. Since the new patent regime was introduced this year, India is fast becoming a global pharma R&D hub.

    2. Assuming an average cost arbitrage of 30-40%, this represents income displacement in the U.S. of $150 billion. Since income is related to GDP by a factor of about 2.5, this translates to a GDP impact of $300 – $500 billion. Not inconsequential by any means.

    3. These export numbers are quite conservative since the Indian income portion of major MNCs (225 of the Fortune 500 are in India) are not counted as exports. Nor is retained earnings of MNCs counted as FDI (unlike in China, for example).

    4. If the U.S. were to raise its H1B limit to 1 million annually, where do you think the educated people will come from – India or sub-saharan Africa?

    5. I wouldn’t get too hyped on the US economy. Ostensibly, GM is the largest auto company in the world but another reality is its long term debt exceeds $300bn while its market cap = $16bn. India’s Infosys would have reached the latter number if it had floated more ADRs last month.

    Sanjay

  26. Babloo, your arrogance is almost breathtaking. Have fun reading papers and living in your bubble. People like you are why I think economics should only be taught at a graduate level.

  27. Whew! This entire outsourcing “controversy” is so much hype… The actual impact is actually insignificant in macro terms.

    Regardless of whether outsourcing to India is more hype than reality, there are reasons why American workers are receptive to the message (and similar messages on immigration, gay marriage, abortion, affirmative action, etc.). That’s the important part here–and figuring out how to stop it. You can present all the facts you want, but it doesn’t really matter if someone’s life predisposes them to listening to skewed messages.

  28. “Suketu’s closing note about having his kids learn Hindi because of better prospects in India = a cute close, but absolutely irrelevant. Your prospects in India improve by learning English — not just in outsourcing but even in domestic industry/ business.”

    Try telling that to the tens of millions of Indians who know English and yet are still dirt-poor with few prospects. People overstate the value of knowing English in India. It can be helpful for certain jobs, but that supply is far more limited than is often appreciated, and it’s already drying up. Outsourcing from the US and UK is stalling– if anything, there’s faster growth in outsourcing from e.g. Germany and Spain these days, so maybe Indian students would be better off learning some German and/or Spanish.

    “Even in Delhi and Bombay, English is sine qua non.”

    There are countless folks in Delhi, Bombay and elsewhere who don’t speak a lick of English and yet are doing just fine. Again, you vastly overstate how valuable it really is to know English. No country in history has ever become rich by faddishly getting caught up in a language imposed from the outside. Foreign languages are ultimately helpful to the extent they help to open up the natives of a developing country to ther markets (which is, again, a big reason that there should be more teaching of e.g. Spanish, German, French, Chinese and Japanese in Indian schools, to open up those markets), but ultimately a country’s economy grows when it builds up its own native languages and cultures to adapt them to modern standards. That’s the only way nations of the world have ever advanced. Even in England itself (where the French-speaking Normans once ruled), the country did not break out of its doldrums until the Normans themselves lost control and the people began to reemphasize English. Same situation in Germany and the Netherlands for example. You get nowhere as a country until you strengthen your country’s own indigenous languages for advanced uses.

    “And of course, the Southern states (Karnataka, TN and AP) which contribute 60% of the outsourcing exports loathe Hindi — in varying degrees”

    Another one of those classic falsehoods that gets spread around too often. Many Indians in the USA are from the south, and upon returning to India we find that most people in the south of the country, especially the younger people have no qualms whatsoever speaking Hindi. To be fair, it’s not the Hindi that you’ll hear up in Bihar or UP. Rather, it’s a sort of part-Hindi colloquial that has some Tamil, Kannada and Malayalam mixed in. It’s a Creole– I guess you could call it “Hindish” if you want. But because it’s not pure Hindi– especially not the ultra-sanitized Hindi that the government tried to force upon people in the 1960s– few people are much bothered about using it.

  29. “Try telling that to the tens of millions of Indians who know English and yet are still dirt-poor with few prospects.”

    Really, Meena? Tens of millions? Dirt-poor? Tell me more about them. Like, where, precisely, are they?

    Strange. Someone left a very similarly worded comment on my post about Mehta’s piece, but under the name Bharati.

    I certainly don’t endorse the privileged status of English in India, but it’s a reality that we’re living with.

  30. I certainly don’t endorse the privileged status of English in India, but it’s a reality that we’re living with.

    Yeah, but Mehta’s point is that his kids already know English. You’re not going to get very far in Gurgaon without knowing some Hindi or Bangalore without knowing some Kannada. The guys delivering your everyday services don’t all speak English.

  31. “In Bombay…I regularly found my place near the bottom of the class….But in my American school…I was…near the top of the class.”

    I did the opposite thing a few years back. When I was in a Canadian school, I was in the bottom of my class for math because I couldn’t get the teacher to clarify the instructions. Teachers can make even the most simple thing sound so “high falutin” by puffing it up with verbiage. Simple Math does not have to explained very much, just “demonstrated.” There is nothing to “explain” about arithmetic, for example, unless you are at the university level reading “Principia Mathematica.”

    After moving to Pakistan, we had detailed textbooks (from Singapore) with clear examples, and no “tricks”, so I moved to the top of the class.

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