Monday, June 06, 2005

A flat world?

Times of India, June 5, 2005

“When I was growing up, my parents told me, ‘Finish your dinner. People in China and India are starving. I now tell my daughters, ‘Finish your homework. People in India and China are starving for your job.’” Tom Friedman, the influential columnist of the New York Times recounts this in his new book, The World is Flat: a Brief History of the Twenty-first Century. He argues that technology and market reforms are fast flattening the playing field in the global economy, where India and China have emerged as early winners. If things keep going like this, we may soon realise Adam Smith’s dream of a world in which standards of living will converge.

This is Friedman’s flat, democratic, connected world. Without a trace of irony Friedman compares himself to Christopher Columbus, who set sail in 1492 for the riches of India, but found America instead; yet he declared that the world was round. 512 years later, Friedman flies east to Bangalore once again seeking India’s wealth, but discovers that the world is flat. By "flat" he means "level," as in the level playing field on which virtually any nation can now compete, thanks to the explosion of global telecommunications, especially the Internet, which is levelling all kinds of hierarchies. The riches he finds is India’s brainpower–rapidly taking away the West’s jobs.

From the Indian perspective this is indeed an age of unprecedented opportunity. Never before could a young Indian with ambition and smarts rise to the top regardless of where he or she started. Not even the babu can stop him now. Eight of our top ten companies today are run by persons who did not inherit wealth and half of these came from humble backgrounds, not unlike some of our cricketers. Make no mistake, however--India’s rising prosperity is due to the liberal global order. It is General Electric, for example, that invented the outsourcing of white-collar jobs to India. Instead of reviling multinationals, we ought to do what the Chinese do--take full advantage of them.

Ironically, it was Marx who first predicted that the inexorable march of technology and capital would dissolve all feudal, religious, and national barriers. Now that it is happening, it is the West that is complaining. Anxiety about globalisation is the reason behind the negative French vote last week. The French want to protect their 35 hour week when Indian and Chinese workers are willing to work 35 hours a day. Having preached globalisation to the world, Westerners find that they prefer the unequal, unflat world after all. They will now have to earn the high salaries to which they are addicted. They are suffering from the withdrawal symptoms of an undue sense of entitlement.

Global competitive markets are helping to flatten urban India but what about our hierarchical villages? Thanks to Lalu and Mayawati, our backward castes certainly have more confidence and higher social esteem. But I don’t think village India will flatten until it gets better schools, health clinics, and every child gets a chance. Nor is it a problem of money either. The dirty truth is that government teachers, doctors, and nurses in villages don’t perform and we don’t sack them. Our state has failed utterly to deliver services to the village. Prof Nirvikar Singh’s fieldwork shows that even a single Internet kiosk in a village can lower transaction costs, provide education and health, and raise the village’s productivity. Perhaps that is the straw we ought to clutch. In the end, the Chinese can depend on their state, but we will always have to depend on ourselves to flatten India.

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Never before could a young Indian with ambition and smarts rise to the top regardless of where he or she started. Not even the babu can stop him now.

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