India's coolie economy

The government must undo the damage inflicted by the flawed policies of globalisation, and India should be converted into a country where entrepreneurs can thrive and the entire population can participate in the economy, says Arvind Kumar.

Since 1991, India's economic policies have focused on creating opportunities for foreign investors and helping foreign firms find cheap labour in the country. The effect of these policies is not a matter of pride for India, as it has been reduced into a producer of coolies for the Anglophone world in various sectors including journalism, politics, the so-called non-profit sector, and computer software.

Yet, we find a number of people applauding India for precisely this aspect of economic change. Such people also applaud China's so-called success in the manufacturing sector but that success is merely a transformation of China into a massive sweatshop for the Western world while its own people are mired in poverty. Even N R Narayana Murthy, one of the founders of Infosys, recently lamented that while India had allowed the software sector to thrive, it lagged in the hardware sector and China had become the “factory of the world".

When the British ruled India, a common complaint of the freedom-fighters was that Indian resources and labour were used for improving Britain while making India impoverished. Economic opportunities were available only to a small segment of the population that possessed a knowledge of English. Even these opportunities were in the form of jobs to aid the British in some manner and those who worked for the British imperial masters were called coolies. The policies related to globalisation are not very different from the British laws that invited the ire of Indian freedom-fighters and the term 'coolie' accurately describes those who work today for Western entities.

That the situation today in India is no different from the 19th century and allows only English-speaking people to thrive should surprise nobody. In his speech in Parliament in July 1991, then finance minister Dr Manmohan Singh invited the forces of globalisation into India and the theme of 'international' and 'foreign' players gaining access to India dominated his speech.

India's policies were soon aligned with the agenda of mercantilist institutions of the West such as the World Trade Organization and the International Monetary Fund. These policies were focused towards increasing the shipment of goods to the West, providing labour to Western countries, granting monopolies to Western corporations, and increasing their profits. There were even cases of the government guaranteeing the profits of foreign firms. Every policy that was put in place was geared towards bettering the lives of people in the West using Indian labour and resources.

As a result, a large section of the Indian population aspires to become some type of coolie as a career choice. Infosys, the firm Narayana Murthy founded, is a symptom of this problem in the Indian economy. It is not a centre for innovation but just a successful herding of coolies. Infosys is similar to the businesses operated by employment agents who send labourers to Dubai and other places in Western Asian countries. The main difference between the brokers who find jobs for poor people in Dubai and the founder of Infosys is that most brokers were not fortunate enough to get educated at an Indian Institute of Technology. They do what they can for a livelihood while also finding jobs for poor labourers.

While Infosys can be classified as a business operation, setting up such a business cannot really be considered entrepreneurship as a significant part of the revenues of such businesses is based on merely managing the pay checks of the labour force in various countries along with the logistics and paperwork related to their visa applications. Such businesses are heavily dependent on government regulations preventing the free flow of labour across borders.

Entrepreneurship involves under-consumption and risk-taking on the part of the entrepreneur. When the founder of Infosys embarked on this business of supplying cheap labour to other countries, he was wealthy by Indian standards by virtue of being an NRI and was also armed with a degree from an IIT which was highly subsidised. His business model was also free of risks typically associated with new ventures.

For its part, by setting apart taxpayer money for venture capital as with the India Aspiration Fund, the government too has demonstrated that it does not understand entrepreneurship. Payment of such money is a combination of welfare for educated people and bureaucrats picking winners in the marketplace. Additionally, there is no risk on the part of the businesses that receive capital from the government as they use other people's money. This is a classic case of privatised profits and socialised losses. The government needs to stop handing out money and must instead make changes to the system that will allow ordinary Indians to thrive without depending on handouts.

Narayana Murthy has also called for greater autonomy for Indian Institutes of Management. These calls must be ignored as the institutions built using the money of Indian citizens should not be gifted away to wealthy people. Greater autonomy for IIMs would translate into the de facto ownership of the IIMs resting with the Board of Governors even as they are funded using taxpayers’ money.

Instead, the management of institutes of higher education must be made more inclusive by involving people who represent the ethos of India. For example, IIM Bangalore now has the founder of Biocon among its Board of Governors. Like Infosys, Biocon too was not the result of entrepreneurship based on innovation and risk-taking but was set up as an Indian subsidiary of an Irish brewery which was forced by laws of the time to work with an Indian partner. This firm eventually produced generic drugs and took advantage of the economic climate during which many foreign firms offshored their work to the Indian labour force. IIM Bangalore should bring on board groups like the Karnataka Rajya Raitha Sangha or the Swadeshi Jagran Manch which have a sound understanding of topics like economics as well as the needs of Indians.

Another important step that must be taken is the reorientation of the education system so that graduates are equipped to contribute to the development of India. This must not be achieved through coercion but by making opportunities available in lucrative fields to all people of India. This means tertiary education in the most prestigious institutes must be available in Indian languages. Students must be able to pursue education in Indian languages at the best universities in the country and become doctors, engineers, chartered accountants, bank officers and bureaucrats. Various branches of the government must conduct their business in Indian languages.

The government must also replace its economic advisers as they represent Western interests and advocate economic theories developed in the West. Their advocacy is a manifestation of the coolie mindset and perpetuates the system developed by the British to transfer the wealth of India to the West. The theories peddled today by those calling themselves experts on trade were created to help the East India Company increase its profits. Economic theories developed in the West have failed in every country that has tried them and the theories have not been successful even on their home turfs in Europe and the US.

Globalisation has also created another tribe of coolies who harbour ill intentions towards India. While doctors, engineers, management consultants and entrepreneurs who serve the West are coolies who typically earn money for an honest day's work, this cannot be said about the coolies of the academia, media and the so-called “non-profit” sector. Many of these Gunga Dins* are paid by the so-called human rights organisations or get grants and prizes from Western institutions to demonise Indians while articulating the political positions of their Western masters whom they place on a pedestal.

It is important to correct the course and undo the damage inflicted by the flawed policies of globalisation. India should be converted into a country where entrepreneurs can thrive and the entire population can participate in the economy. This is not a difficult task but it is important to act before it is too late.

*A poem (1892) by Rudyard Kipling. It is written in the language of an ordinary British soldier praising a native who carries water for the British Army in India and dies taking water to a wounded soldier during a battle. Many people know the last line of the poem: You're a better man than I am, Gunga Din.

Arvind Kumar is an expert on technology and economic issues and can be reached at arvind@classical-liberal.net