Living Between Three Worlds

I work for the most malignant of all corporate species today — an Indian software company specializing in outsourcing.

My fate is not that of a corporate foot-soldier, which — as the television images and newspaper photographs would suggest — involves a life of labor in a little cell and in tandem with many other, equally industrious honey-bees, armed only with a workstation and telephone.

My job in marketing and business development does not eschew face-to-face contact. The company I work for is a small one, but it is spaced over three times zones: in Dallas, New York and Calcutta.

But what makes the company distinctive is that it is a post-modern firm, since such a firm could scarcely have existed ten years ago. It is, what Manuel Castells — Professor of City and Regional Planning at the University of California, Berkeley — would have called a network company, held together through e-mails and teleconferences alone.

Stepping out of the air-conditioned office, I am greeted with the hot, damp touch of a Calcutta dusk. I hail a black and yellow boneshaker of a taxi and instruct the driver to head for my club.

His is an old Ambassador car, a poor Morris Oxford imitation dating back to the 1950s and still unchanged — a veritable monument of the pre-globalization License Raj era.

As the taxi makes its way through the hustle and bustle of Calcutta’s streets, the blaring music and the garish film posters, dodging cows and errant rickshaw pullers, I meditate on the scene around me.

What a contrast between the work I do and the lives they lead! What does globalization mean to these people? If globalization has to mean anything significant to the Indian poor, it must mean a transformation of their lives.

And yet, I can bet 100 to one that their lives will differ in no significant way from their fathers’ or grandfathers’ before them. The only consolation I can offer myself is that my job makes me the avantgarde of a movement which may — over the course of this century — improve their great-grandchildren's lives.

Finally, the taxi reaches the club and an old Victorian clubhouse comes into view amidst the sprawling golf course, manicured lawns and tennis courts. I head for the tea-lounge.

With its Daniels' water-color prints, richly brocaded chairs, dark mahogany paneling and wooden parquetry, this is the place to enjoy coffee after work. A liveried waiter brings me some.

The club itself is a product of that last great age of globalization, what Eric Hobsbawm called “The Age of Empire.” Now that we are in another age of globalization, little of the décor seems to have changed since then.

Only then, as an Indian, I would not have been allowed to enter its hallowed portals. Perhaps some things do change after all!
Sipping my coffee, I ponder over the question that is being debated in England: “Import workers or export jobs?” The first thing that strikes me is that it presents a so very First World perspective.

Sitting in a Third World country, the proposition could equally be phrased as: “Export workers — or import jobs?” Actually, whichever way you state it, the economist's answer is the same and is very simple: It does not matter.

As a graduate student of economics, I have imbibed the theorems of microeconomics almost with my mother's milk. If we view the right to work and citizenship as a bundle of legal rights, then their free exchange will move resources to their highest valued use, thereby maximizing global output.

Under such conditions, migration and outsourcing are two sides of the same coin, temporary disequilibrium conditions leading to an eventual equilibrium.

An admirable goal? Indeed! Realizable? It will founder on the frailties of human nature. Equal real wages for equivalent work throughout the world is most heart-warming as long as it doesn't affect my own lifestyle. Equality is good so long that I am immune from its pressures.

By a strange quirk of fate, I am condemned to view the problems of migration and outsourcing from both sides.

As a child of an Indian father and English mother, I have Indian citizenship, but also a Right of Abode which allows me to work in the United Kingdom. At the same time, I am an applicant for a U.S. Green Card.

Much of my higher education occurred in the United States and I have worked in India, the U.K. and the United States. A real citizen of one country, I remain an imaginary citizen of two others.

Trapped between three worlds, I feel justifiably proud at India's success in outsourcing. Yet, I am equally aware that as a potential migrant to the U.K. or the United States, the reduction in transaction costs that makes outsourcing possible has an infringing consequence: It also reduces the economic attractiveness of these two countries to me.

Once we become members of an exclusive club (like the one I am sitting in), we would like all further applications stopped!

It is this duality of human nature that makes me view the future of globalization with foreboding. Just as the last great age of globalization engendered uncontrolled jingoism and came crashing down amidst the mud and filth of Flanders' fields, our age too has its weaknesses.

Foremost among them is protectionism, which includes eliminating immigration. Equality of real wages for equivalent work is going to hit some people in the developed world really hard — and for reasons not of their own making.

Before the Industrial Revolution, poverty was equally distributed throughout the globe, and therefore global inequality was low.

Certainly, great differences existed between king and peasant in all feudal societies, but the lot of a peasant in India and Europe was fairly similar: a life at the margin.

Then came the Industrial Revolution — and a few countries began to pull away from the rest. This secular separation has gone on for over two centuries now.

It has reached a point where the average bachelor's degree holder in India has to make do on a few dollars a day, while his U.S. counterpart with a similar educational level enjoys a three-bedroom house, even if both are doing the same work.

The reason why this could go on was because, for the U.S. worker, the labor market he or she had to face was the local, or at best, the national market. The fall in transaction costs owing to globalization has meant that the relevant market for this worker is now the international one.

This dramatic outward shift of the labor supply curve will naturally reduce his wages. At the same time, it reduces global inequality in remunerations for similar work. Both migration and outsourcing can be viewed as an attempt to arbitrage these existing wage differentials.

This will certainly lead to a backlash, as is happening in the United States and Europe right now. Nor will it go away easily, not even with a return to economic prosperity.

This is because of the fundamental contradiction that lies at the heart of the liberal political and economic order. The liberal economic order demands progression towards perfect competition, which ultimately devalues citizenship rights. On the other hand, the liberal political order is predicated by the concert of nation-states.

We have, so far, no other bases for the establishment of democratic regimes — and the EU is still too immature and unloved to take its place that demands robust citizenship rights.

The economic entrepreneur is expected to follow the demands and needs of the consumer slavishly, but if the political entrepreneur — that is, the politician — were to follow this advice, a protectionist regime could easily emerge. After all, demand for protection is a natural reaction to declining or stagnant income levels.

There is no easy way out of this dilemma and only a good dose of common-sense and self