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November 13, 2006
India will kill us -- economically, that is
Kim Du Toit has left Texas and is blogging as he makes his way 'round the world. Today he follows up on a previous dispatch from the exotic East, with a report on the nation that is truly an economic tiger, although most Americans think of it as being a rancid, festering sore of poverty-stricken would-be handout recipients.
India’s GDP is set to reach, and maintain, about 8% per annum. If Bangalore is in any way representative of the country (and it may not be), that goal is laughably modest.
This is a city which works—and I don’t mean in terms of its infrastructure, on which I’ve passed scathing comment earlier. The city works despite its infrastructure. The sheer amount of industry, in the human sense of the word, is awe-inspiring. Just outside the city limits, for example, we passed what looked like a five-acre area of open mud pits, with about a hundred guys swarming around in the mud. My rough guess is that they produce, by hand, enough clay to make about a thousand bricks a day. Ten bricks per man. Bricks are unbelievably cheap. Somehow, that ten bricks per man-day still produces enough income for a man to feed himself and his family.
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Here’s the thing: everyone works really, really hard. Construction workers (more of whom later) start work at dawn, and will work until 10pm at night—no hard hats, no protective boots, no OSHA—and move materials which would tax a crane, nonstop. Even the old ladies work. See those flower garlands?
Those are everywhere: people wear them around their necks, drape them over their cars and on the front of buses and trucks, hang them in their rooms and offices. They are all made of fresh flowers, threaded by hand each day by tens of thousands of old ladies. Cost: 7 rupees (about 16 cents).
Somehow, in that 16-cent item, there is enough profit for the growers, the merchandisers who bring them into the city each day, the old ladies who turn the flowers into garlands, and the merchants who sell the garlands from their stalls. And on this particular street, there must have been fifty stalls selling garlands.
Ditto fruits and vegetables, which are everywhere ... and which are brought to market by a sophisticated delivery system: Yeah, that’s a handcart—pushed by a 17-year-old boy each day from the warehouse to the stall.
The industry, therefore, is of an ant-like nature: millions of people moving grains of sand around in some kind of Brownian motion, until everyone gets fed, flowered or whatever.
And it seems to work. There is no way that a Wal-Mart delivery truck would make it through Bangalore’s traffic, which is likewise ant-like (millions of taxi-scooters, mopeds, motorcycles, cars and buses):
The kind of large-scale logistics system which is so common in America just won’t work in India—and frankly, I’m not sure it’s needed.
Because here’s the big, dark secret: in a land where labor is cheap (no minimum wage), plentiful and willing (more on that, another time), there’s not only no need for labor-saving devices and systems, but such devices and systems would be counterproductive in that millions of people would be denied the opportunity to make a living—even though, by Western standards, the pittance earned would not be called a “living wage”.
And this strange, backward society is going to take us by the throat and kill us. In my next piece in the series, we’ll examine why we’ve told the kids never to become software programmers or get involved in any knowledge-based activity.
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Forget NAFTA—it’s as dead as a dodo. If I had the choice of choosing a cheap Mexican workforce and a cheap Indian one, well, there is no competition.
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This is the future: the U.S. market and know-how coupled with India’s vast labor pool and growing technical expertise.
The best part? They love us. And as long as we don’t screw it up, we have it made.
Du Toit's hit on the secret to economic success: a nation of hard working entrepreneurs who want to succeed, not ensure that all boats rise to the same level. Eight percent GDP!
The only thing standing between us and that kind of economic growth is layers of government regulation and tax policies acting as a brake.
Oh, well, yes, there is that bit about our sloth, but we are positively Bangalorian when compared to our Socialized, cradle-to-grave coddled European competitors.
So, it's all looking good. So long as the Islamic nutters don't nuke us all back to the 7th century.
Posted by Mike Lief at November 13, 2006 07:54 AM
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Comments
There can be no doubt that our American empire is in decline. I love our country and our way of life.
Without revealing too much about my background, I am trained in math and the physical sciences. I believe in statistics and hard facts. I do not believe in shying away from the numbers when confronted by troubling data.
My point is that genetic diversification has been taken to such an extreme in the United States that the country will not be able to compete against rising Asian nations with much higher average levels of intelligence.
At the present time, open American markets and economic opportunity have helped us maintain a robust economy where brainpower can be recruited from the four corners of the world.
As capital begins to flow to India and other nations and as their markets modernize and become more attractive to foreign investment, the intellectual giants who now make their way from India to our shores will stay home, compete against us and become our masters.
Posted by: Sir I.N. at November 14, 2006 10:02 PM