The Thrill of Economic Growth

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The words came back to us yesterday. We were meeting with a man who advises wealthy Indians on what to do with their money.

“It’s all changed here…especially in the last five years. I mean the attitude…everyone is so ambitious. There is no social stability…because everyone is trying so hard to move up.

“You know…one thing that is nice about India is that a middle-class family can get a lot of household help, because there are so many people at the bottom willing to work for nothing. But we may be the last generation to enjoy that advantage. Those people that you see sleeping on the sidewalks, for example. They are probably not going to do that forever. They have jobs. They are probably from the country…they’ve come into town recently because this is where the opportunity is.

“There really aren’t any unemployed people. If you’re unemployed in Bombay, you starve to death. No, everyone finds work. And these people come from the country…and they get little jobs. And they sleep on the pavement and look for other opportunities. And then they get jobs here and there… maybe they’ll learn to drive a car and become a driver for a middle class family.

“But here’s the big change. He won’t stop there. He’ll bring his family into the city. And he’ll want his children to learn English. And the next thing you know they’ll be going to some technical college…or even going to the United States or England for their educations. And then…well, it’s a different world.”

Yes…very different. Because he’ll be competing with engineers, doctors, lawyers, and patent examiners from all over the world.

But wait…as soon as they enter this international professional class, their wages rise. One thing we’ve learned — and we are already practically an expert; we’ve been here 18 hours — is that, at the top, there isn’t that much difference between prices here and prices in the West. A financial analyst here can cost as much as one in the United States. A hotel room at a top hotel is about the same as in London. Even office space is not that much different. And property generally — can be more expensive than in downtown Baltimore.

The big difference is this huge pool of striving, groaning, sweating labor. It keeps coming in from the country — where there are said to be some 750 million people in the countryside…whose work is gradually being made superfluous by multinationals moving into the market and globalized commerce. They sleep on pavements…in railway stations…in mean tenements with a dozen to a room….in crowded shanty towns in the slums on the fringes of the big city. Where will they go? What will they do? Will they not continue to rub down the American working stiff’s salary? Will they not continue coming into town…and scratching their way into the middle classes? Will they not push and shove their way into direct competition with the West…and maybe even surpass it?

Maybe…

Bill Bonner [send him mail] is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century and Empire of Debt: The Rise Of An Epic Financial Crisis.

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